Correlation Between JD Health and Ryman Healthcare

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

By analyzing existing cross correlation between JD Health International and Ryman Healthcare Limited, you can compare the effects of market volatilities on JD Health and Ryman Healthcare 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 JD Health with a short position of Ryman Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of JD Health and Ryman Healthcare.

Diversification Opportunities for JD Health and Ryman Healthcare

-0.38

Correlation Coefficient

JD Health  Ryman Healthcare

Very good diversification

The 3 months correlation between JDHIF and Ryman is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding JD Health International and Ryman Healthcare Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryman Healthcare and JD 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 JD Health International are associated (or correlated) with Ryman Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryman Healthcare has no effect on the direction of JD Health i.e., JD Health and Ryman Healthcare go up and down completely randomly.

Pair Corralation between JD Health and Ryman Healthcare

Assuming the 90 days horizon JD Health International is expected to generate 0.72 times more return on investment than Ryman Healthcare. However, JD Health International is 1.4 times less risky than Ryman Healthcare. It trades about 0.04 of its potential returns per unit of risk. Ryman Healthcare Limited is currently generating about -0.1 per unit of risk. If you would invest  346.00  in JD Health International on March 15, 2024 and sell it today you would earn a total of  19.00  from holding JD Health International or generate 5.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

JD Health International  vs.  Ryman Healthcare Limited

JD Health International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in JD Health International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, JD Health may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Ryman Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ryman Healthcare Limited 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 technical and fundamental indicators remain nearly stable which may send shares a bit higher in July 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with JD Health and Ryman Healthcare

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

The idea behind JD Health International and Ryman Healthcare Limited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..