Correlation Between DELCATH SYS and Ryman Healthcare

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

By analyzing existing cross correlation between DELCATH SYS NEW and Ryman Healthcare Limited, you can compare the effects of market volatilities on DELCATH SYS and Ryman Healthcare 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 DELCATH SYS with a short position of Ryman Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of DELCATH SYS and Ryman Healthcare.

Diversification Opportunities for DELCATH SYS and Ryman Healthcare

-0.7

Correlation Coefficient

DELCATH SYS  Ryman Healthcare

Excellent diversification

The 3 months correlation between DELCATH and Ryman is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding DELCATH SYS NEW and Ryman Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Healthcare and DELCATH SYS 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 DELCATH SYS NEW are associated (or correlated) with Ryman Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Healthcare has no effect on the direction of DELCATH SYS i.e., DELCATH SYS and Ryman Healthcare go up and down completely randomly.

Pair Corralation between DELCATH SYS and Ryman Healthcare

Assuming the 90 days trading horizon DELCATH SYS NEW is expected to generate 2.06 times more return on investment than Ryman Healthcare. However, DELCATH SYS is 2.06 times more volatile than Ryman Healthcare Limited. It trades about 0.14 of its potential returns per unit of risk. Ryman Healthcare Limited is currently generating about -0.08 per unit of risk. If you would invest  1,020  in DELCATH SYS NEW on October 23, 2024 and sell it today you would earn a total of  380.00  from holding DELCATH SYS NEW or generate 37.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

DELCATH SYS NEW  vs.  Ryman Healthcare Limited

DELCATH SYS NEW

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DELCATH SYS NEW are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DELCATH SYS reported solid returns over the last few months and may actually be approaching a breakup point.

Ryman Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryman Healthcare Limited 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 DELCATH SYS and Ryman Healthcare

The main advantage of trading using opposite DELCATH SYS and Ryman Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DELCATH SYS position performs unexpectedly, Ryman Healthcare 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 Ryman Healthcare will offset losses from the drop in Ryman Healthcare's long position.

The idea behind DELCATH SYS NEW and Ryman Healthcare Limited 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.