Correlation Between Ramsay Health and Dalata Hotel

Can any of the company-specific risk be diversified away by investing in both Ramsay Health and Dalata Hotel 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 Dalata Hotel 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 Dalata Hotel Group, you can compare the effects of market volatilities on Ramsay Health and Dalata Hotel 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 Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ramsay Health and Dalata Hotel.

Diversification Opportunities for Ramsay Health and Dalata Hotel

-0.79

Correlation Coefficient

Ramsay Health  Dalata Hotel

Pay attention - limited upside

The 3 months correlation between Ramsay and Dalata is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ramsay Health Care and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group 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 Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Ramsay Health i.e., Ramsay Health and Dalata Hotel go up and down completely randomly.

Pair Corralation between Ramsay Health and Dalata Hotel

Assuming the 90 days horizon Ramsay Health Care is expected to under-perform the Dalata Hotel. But the stock apears to be less risky and, when comparing its historical volatility, Ramsay Health Care is 1.25 times less risky than Dalata Hotel. The stock trades about -0.21 of its potential returns per unit of risk. The Dalata Hotel Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  411.00  in Dalata Hotel Group on September 27, 2024 and sell it today you would earn a total of  47.00  from holding Dalata Hotel Group or generate 11.44% 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.  Dalata Hotel Group

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. 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.

Dalata Hotel Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dalata Hotel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ramsay Health and Dalata Hotel

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

The idea behind Ramsay Health Care and Dalata Hotel Group 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 Stocks Directory module to find actively traded stocks across global markets.