Correlation Between Elevance Health and Fulgent Genetics
Can any of the company-specific risk be diversified away by investing in both Elevance Health and Fulgent Genetics 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 Elevance Health and Fulgent Genetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elevance Health and Fulgent Genetics, you can compare the effects of market volatilities on Elevance Health and Fulgent Genetics 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 Elevance Health with a short position of Fulgent Genetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health and Fulgent Genetics.
Diversification Opportunities for Elevance Health and Fulgent Genetics
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Elevance and Fulgent is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health and Fulgent Genetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Genetics and Elevance 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 Elevance Health are associated (or correlated) with Fulgent Genetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Genetics has no effect on the direction of Elevance Health i.e., Elevance Health and Fulgent Genetics go up and down completely randomly.
Pair Corralation between Elevance Health and Fulgent Genetics
Considering the 90-day investment horizon Elevance Health is expected to generate 0.59 times more return on investment than Fulgent Genetics. However, Elevance Health is 1.7 times less risky than Fulgent Genetics. It trades about -0.04 of its potential returns per unit of risk. Fulgent Genetics is currently generating about -0.03 per unit of risk. If you would invest 46,315 in Elevance Health on September 12, 2024 and sell it today you would lose (8,048) from holding Elevance Health or give up 17.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elevance Health vs. Fulgent Genetics
Performance |
| Timeline |
| Elevance Health |
| Fulgent Genetics |
Elevance Health and Fulgent Genetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elevance Health and Fulgent Genetics
The main advantage of trading using opposite Elevance Health and Fulgent Genetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elevance Health position performs unexpectedly, Fulgent Genetics 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 Fulgent Genetics will offset losses from the drop in Fulgent Genetics' long position.| Elevance Health vs. Cigna Corp | Elevance Health vs. UnitedHealth Group Incorporated | Elevance Health vs. Centene Corp | Elevance Health vs. Molina Healthcare |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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