Correlation Between OAKTRSPECLENDNEW and Ramsay Health

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

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

Diversification Opportunities for OAKTRSPECLENDNEW and Ramsay Health

-0.18

Correlation Coefficient

OAKTRSPECLENDNEW  Ramsay Health

Good diversification

The 3 months correlation between OAKTRSPECLENDNEW and Ramsay is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW i.e., OAKTRSPECLENDNEW and Ramsay Health go up and down completely randomly.

Pair Corralation between OAKTRSPECLENDNEW and Ramsay Health

Assuming the 90 days trading horizon OAKTRSPECLENDNEW is expected to generate 0.93 times more return on investment than Ramsay Health. However, OAKTRSPECLENDNEW is 1.07 times less risky than Ramsay Health. It trades about 0.07 of its potential returns per unit of risk. Ramsay Health Care is currently generating about -0.17 per unit of risk. If you would invest  1,373  in OAKTRSPECLENDNEW on September 23, 2024 and sell it today you would earn a total of  86.00  from holding OAKTRSPECLENDNEW or generate 6.26% return on investment over 90 days.

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

OAKTRSPECLENDNEW  vs.  Ramsay Health Care

OAKTRSPECLENDNEW

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in OAKTRSPECLENDNEW are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, OAKTRSPECLENDNEW may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with OAKTRSPECLENDNEW and Ramsay Health

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

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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.