Correlation Between Centene Corp and Ramsay Gnrale

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

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

Diversification Opportunities for Centene Corp and Ramsay Gnrale

0.69

Correlation Coefficient

Centene Corp  Ramsay Gnrale

Poor diversification

The 3 months correlation between Centene and Ramsay is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Centene Corp and Ramsay Gnrale de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Gnrale de and Centene Corp 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 Centene Corp are associated (or correlated) with Ramsay Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Gnrale de has no effect on the direction of Centene Corp i.e., Centene Corp and Ramsay Gnrale go up and down completely randomly.

Pair Corralation between Centene Corp and Ramsay Gnrale

Assuming the 90 days horizon Centene Corp is expected to under-perform the Ramsay Gnrale. But the stock apears to be less risky and, when comparing its historical volatility, Centene Corp is 1.37 times less risky than Ramsay Gnrale. The stock trades about -0.06 of its potential returns per unit of risk. The Ramsay Gnrale de is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,165  in Ramsay Gnrale de on September 14, 2024 and sell it today you would lose (25.00) from holding Ramsay Gnrale de or give up 2.15% of portfolio value over 90 days.

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

Centene Corp  vs.  Ramsay Gnrale de

Centene Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centene Corp 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.

Ramsay Gnrale de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ramsay Gnrale de 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 Centene Corp and Ramsay Gnrale

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

The idea behind Centene Corp and Ramsay Gnrale de 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..