Correlation Between Ramsay Generale and Worldline

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

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

Diversification Opportunities for Ramsay Generale and Worldline

0.64

Correlation Coefficient

Ramsay Generale  Worldline

Poor diversification

The 3 months correlation between Ramsay and Worldline is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Generale De and Worldline SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worldline SA and Ramsay Generale 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 Ramsay Generale De are associated (or correlated) with Worldline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worldline SA has no effect on the direction of Ramsay Generale i.e., Ramsay Generale and Worldline go up and down completely randomly.

Pair Corralation between Ramsay Generale and Worldline

Assuming the 90 days trading horizon Ramsay Generale De is expected to under-perform the Worldline. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Generale De is 2.16 times less risky than Worldline. The stock trades about -0.24 of its potential returns per unit of risk. The Worldline SA is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  828.00  in Worldline SA on August 30, 2024 and sell it today you would lose (186.00) from holding Worldline SA or give up 22.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Ramsay Generale De  vs.  Worldline SA

Ramsay Generale De

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ramsay Generale De has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Worldline SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Worldline SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ramsay Generale and Worldline

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

The idea behind Ramsay Generale De and Worldline SA 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 Global Correlations module to find global opportunities by holding instruments from different markets.