Correlation Between Ramsay Générale and Dolby Laboratories

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

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

Diversification Opportunities for Ramsay Générale and Dolby Laboratories

-0.77

Correlation Coefficient

Ramsay Générale  Dolby Laboratories

Pay attention - limited upside

The 3 months correlation between Ramsay and Dolby is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Gnrale de and Dolby Laboratories in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolby Laboratories and Ramsay Générale 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 Gnrale de are associated (or correlated) with Dolby Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolby Laboratories has no effect on the direction of Ramsay Générale i.e., Ramsay Générale and Dolby Laboratories go up and down completely randomly.

Pair Corralation between Ramsay Générale and Dolby Laboratories

Assuming the 90 days horizon Ramsay Gnrale de is expected to under-perform the Dolby Laboratories. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Gnrale de is 1.07 times less risky than Dolby Laboratories. The stock trades about -0.21 of its potential returns per unit of risk. The Dolby Laboratories is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  6,450  in Dolby Laboratories on September 1, 2024 and sell it today you would earn a total of  950.00  from holding Dolby Laboratories or generate 14.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.48%
Values	Daily Returns

Ramsay Gnrale de  vs.  Dolby Laboratories

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 December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Dolby Laboratories

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dolby Laboratories are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dolby Laboratories reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ramsay Générale and Dolby Laboratories

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

The idea behind Ramsay Gnrale de and Dolby Laboratories 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.