Correlation Between X FAB and Ramsay Health
Can any of the company-specific risk be diversified away by investing in both X FAB and Ramsay Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining X FAB and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between X FAB Silicon Foundries and Ramsay Health Care, you can compare the effects of market volatilities on X FAB and Ramsay Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in X FAB with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Ramsay Health.
Diversification Opportunities for X FAB and Ramsay Health
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between XFB and Ramsay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Ramsay Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Health Care and X FAB is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on X FAB Silicon Foundries are associated (or correlated) with Ramsay Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Health Care has no effect on the direction of X FAB i.e., X FAB and Ramsay Health go up and down completely randomly.
Pair Corralation between X FAB and Ramsay Health
Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to generate 1.51 times more return on investment than Ramsay Health. However, X FAB is 1.51 times more volatile than Ramsay Health Care. It trades about -0.03 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.05 per unit of risk. If you would invest 665.00 in X FAB Silicon Foundries on September 5, 2024 and sell it today you would lose (241.00) from holding X FAB Silicon Foundries or give up 36.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
X FAB Silicon Foundries vs. Ramsay Health Care
Performance |
| Timeline |
| X FAB Silicon |
| Ramsay Health Care |
X FAB and Ramsay Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with X FAB and Ramsay Health
The main advantage of trading using opposite X FAB and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB position performs unexpectedly, Ramsay Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Ramsay Health will offset losses from the drop in Ramsay Health's long position.| X FAB vs. Gladstone Investment | X FAB vs. Genco Shipping Trading | X FAB vs. SEI INVESTMENTS | X FAB vs. ECHO INVESTMENT ZY |
| Ramsay Health vs. Superior Plus Corp | Ramsay Health vs. NMI Holdings | Ramsay Health vs. Origin Agritech | Ramsay Health vs. SIVERS SEMICONDUCTORS AB |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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