Correlation Between Centuria Industrial and Ramsay Health

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

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

Diversification Opportunities for Centuria Industrial and Ramsay Health

-0.69

Correlation Coefficient

Centuria Industrial  Ramsay Health

Excellent diversification

The 3 months correlation between Centuria and Ramsay is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit 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 Centuria Industrial 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 Centuria Industrial Reit 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 Centuria Industrial i.e., Centuria Industrial and Ramsay Health go up and down completely randomly.

Pair Corralation between Centuria Industrial and Ramsay Health

Assuming the 90 days trading horizon Centuria Industrial Reit is expected to under-perform the Ramsay Health. In addition to that, Centuria Industrial is 3.73 times more volatile than Ramsay Health Care. It trades about -0.15 of its total potential returns per unit of risk. Ramsay Health Care is currently generating about 0.16 per unit of volatility. If you would invest  10,507  in Ramsay Health Care on October 10, 2024 and sell it today you would earn a total of  232.00  from holding Ramsay Health Care or generate 2.21% return on investment over 90 days.

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

Centuria Industrial Reit  vs.  Ramsay Health Care

Centuria Industrial Reit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centuria Industrial Reit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Ramsay Health Care

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ramsay Health Care are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ramsay Health is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Centuria Industrial and Ramsay Health

The main advantage of trading using opposite Centuria Industrial and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial 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 Centuria Industrial Reit 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.