Correlation Between Ramsay Health and Hansen Technologies

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

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

Diversification Opportunities for Ramsay Health and Hansen Technologies

-0.61

Correlation Coefficient

Ramsay Health  Hansen Technologies

Excellent diversification

The 3 months correlation between Ramsay and Hansen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies and Ramsay Health 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 Health Care are associated (or correlated) with Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Ramsay Health i.e., Ramsay Health and Hansen Technologies go up and down completely randomly.

Pair Corralation between Ramsay Health and Hansen Technologies

Assuming the 90 days trading horizon Ramsay Health Care is expected to under-perform the Hansen Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 1.29 times less risky than Hansen Technologies. The stock trades about -0.19 of its potential returns per unit of risk. The Hansen Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  468.00  in Hansen Technologies on September 26, 2024 and sell it today you would earn a total of  68.00  from holding Hansen Technologies or generate 14.53% return on investment over 90 days.

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

Ramsay Health Care  vs.  Hansen Technologies

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. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Hansen Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hansen Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansen Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ramsay Health and Hansen Technologies

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

The idea behind Ramsay Health Care and Hansen Technologies 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.