Correlation Between SOGECLAIR and Ramsay Health

Can any of the company-specific risk be diversified away by investing in both SOGECLAIR 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 SOGECLAIR and Ramsay Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SOGECLAIR SA INH and Ramsay Health Care, you can compare the effects of market volatilities on SOGECLAIR 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 SOGECLAIR with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOGECLAIR and Ramsay Health.

Diversification Opportunities for SOGECLAIR and Ramsay Health

-0.14

Correlation Coefficient

SOGECLAIR  Ramsay Health

Good diversification

The 3 months correlation between SOGECLAIR and Ramsay is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding SOGECLAIR SA INH 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 SOGECLAIR 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 SOGECLAIR SA INH 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 SOGECLAIR i.e., SOGECLAIR and Ramsay Health go up and down completely randomly.

Pair Corralation between SOGECLAIR and Ramsay Health

Assuming the 90 days horizon SOGECLAIR SA INH is expected to generate 1.16 times more return on investment than Ramsay Health. However, SOGECLAIR is 1.16 times more volatile than Ramsay Health Care. It trades about 0.01 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.06 per unit of risk. If you would invest  1,825  in SOGECLAIR SA INH on September 17, 2024 and sell it today you would earn a total of  0.00  from holding SOGECLAIR SA INH or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SOGECLAIR SA INH  vs.  Ramsay Health Care

SOGECLAIR SA INH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOGECLAIR SA INH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SOGECLAIR is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ramsay Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ramsay Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with SOGECLAIR and Ramsay Health

The main advantage of trading using opposite SOGECLAIR and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOGECLAIR 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.

The idea behind SOGECLAIR SA INH and Ramsay Health Care pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.