Correlation Between Embecta Corp and GE HealthCare
Can any of the company-specific risk be diversified away by investing in both Embecta Corp and GE 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 Embecta Corp and GE HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Embecta Corp and GE HealthCare Technologies, you can compare the effects of market volatilities on Embecta Corp and GE 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 Embecta Corp with a short position of GE HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Embecta Corp and GE HealthCare.
Diversification Opportunities for Embecta Corp and GE HealthCare
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Embecta and GEHC is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Embecta Corp and GE HealthCare Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE HealthCare Techno and Embecta Corp 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 Embecta Corp are associated (or correlated) with GE HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE HealthCare Techno has no effect on the direction of Embecta Corp i.e., Embecta Corp and GE HealthCare go up and down completely randomly.
Pair Corralation between Embecta Corp and GE HealthCare
Given the investment horizon of 90 days Embecta Corp is expected to generate 5.1 times less return on investment than GE HealthCare. In addition to that, Embecta Corp is 2.09 times more volatile than GE HealthCare Technologies. It trades about 0.0 of its total potential returns per unit of risk. GE HealthCare Technologies is currently generating about 0.03 per unit of volatility. If you would invest 7,128 in GE HealthCare Technologies on October 20, 2024 and sell it today you would earn a total of 1,346 from holding GE HealthCare Technologies or generate 18.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Embecta Corp vs. GE HealthCare Technologies
Performance |
| Timeline |
| Embecta Corp |
| GE HealthCare Techno |
Embecta Corp and GE HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Embecta Corp and GE HealthCare
The main advantage of trading using opposite Embecta Corp and GE HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Embecta Corp position performs unexpectedly, GE 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 GE HealthCare will offset losses from the drop in GE HealthCare's long position.| Embecta Corp vs. Baxter International | Embecta Corp vs. West Pharmaceutical Services | Embecta Corp vs. ResMed Inc | Embecta Corp vs. The Cooper Companies, |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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