Correlation Between Fisher Paykel and Ramsay Health

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

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

Diversification Opportunities for Fisher Paykel and Ramsay Health

-0.33

Correlation Coefficient

Fisher Paykel  Ramsay Health

Very good diversification

The 3 months correlation between Fisher and Ramsay is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Paykel Healthcare 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 Fisher Paykel 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 Fisher Paykel Healthcare 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 Fisher Paykel i.e., Fisher Paykel and Ramsay Health go up and down completely randomly.

Pair Corralation between Fisher Paykel and Ramsay Health

Assuming the 90 days trading horizon Fisher Paykel Healthcare is expected to under-perform the Ramsay Health. But the stock apears to be less risky and, when comparing its historical volatility, Fisher Paykel Healthcare is 1.13 times less risky than Ramsay Health. The stock trades about -0.13 of its potential returns per unit of risk. The Ramsay Health Care is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,354  in Ramsay Health Care on December 30, 2024 and sell it today you would earn a total of  106.00  from holding Ramsay Health Care or generate 3.16% return on investment over 90 days.

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

Fisher Paykel Healthcare  vs.  Ramsay Health Care

Fisher Paykel Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fisher Paykel Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ramsay Health Care

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ramsay Health Care are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Ramsay Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Fisher Paykel and Ramsay Health

The main advantage of trading using opposite Fisher Paykel and Ramsay Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fisher Paykel 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 Fisher Paykel Healthcare 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.