Correlation Between FOX P and Ramsay Health

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

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

Diversification Opportunities for FOX P and Ramsay Health

-0.79

Correlation Coefficient

FOX P  Ramsay Health

Pay attention - limited upside

The 3 months correlation between FOX and Ramsay is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding FOX P B 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 FOX P 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 FOX P B 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 FOX P i.e., FOX P and Ramsay Health go up and down completely randomly.

Pair Corralation between FOX P and Ramsay Health

Assuming the 90 days trading horizon FOX P B is expected to generate 0.99 times more return on investment than Ramsay Health. However, FOX P B is 1.01 times less risky than Ramsay Health. It trades about 0.13 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  2,473  in FOX P B on September 24, 2024 and sell it today you would earn a total of  1,907  from holding FOX P B or generate 77.11% return on investment over 90 days.

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

FOX P B  vs.  Ramsay Health Care

FOX P B

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FOX P B are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, FOX P reported solid returns over the last few months and may actually be approaching a breakup point.

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 FOX P and Ramsay Health

The main advantage of trading using opposite FOX P and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOX P 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 FOX P B 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.