Correlation Between IND+COMMBK CHINA and Ramsay Health

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

By analyzing existing cross correlation between INDCOMMBK CHINA ADR20 and Ramsay Health Care, you can compare the effects of market volatilities on IND+COMMBK CHINA and Ramsay Health 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 IND+COMMBK CHINA with a short position of Ramsay Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of IND+COMMBK CHINA and Ramsay Health.

Diversification Opportunities for IND+COMMBK CHINA and Ramsay Health

0.65

Correlation Coefficient

IND+COMMBK CHINA  Ramsay Health

Poor diversification

The 3 months correlation between IND+COMMBK and Ramsay is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding INDCOMMBK CHINA ADR20 and Ramsay Health Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ramsay Health Care and IND+COMMBK CHINA 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 INDCOMMBK CHINA ADR20 are associated (or correlated) with Ramsay Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ramsay Health Care has no effect on the direction of IND+COMMBK CHINA i.e., IND+COMMBK CHINA and Ramsay Health go up and down completely randomly.

Pair Corralation between IND+COMMBK CHINA and Ramsay Health

Assuming the 90 days trading horizon IND+COMMBK CHINA is expected to generate 1.06 times less return on investment than Ramsay Health. In addition to that, IND+COMMBK CHINA is 1.42 times more volatile than Ramsay Health Care. It trades about 0.1 of its total potential returns per unit of risk. Ramsay Health Care is currently generating about 0.14 per unit of volatility. If you would invest  1,840  in Ramsay Health Care on April 24, 2025 and sell it today you would earn a total of  260.00  from holding Ramsay Health Care or generate 14.13% return on investment over 90 days.

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

INDCOMMBK CHINA ADR20  vs.  Ramsay Health Care

INDCOMMBK CHINA ADR20

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INDCOMMBK CHINA ADR20 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, IND+COMMBK CHINA reported solid returns over the last few months and may actually be approaching a breakup point.

Ramsay Health Care

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ramsay Health Care are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ramsay Health reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IND+COMMBK CHINA and Ramsay Health

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

The idea behind INDCOMMBK CHINA ADR20 and Ramsay Health Care 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.