Correlation Between Fulgent Genetics and Cross Country
Can any of the company-specific risk be diversified away by investing in both Fulgent Genetics and Cross Country 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 Fulgent Genetics and Cross Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fulgent Genetics and Cross Country Healthcare, you can compare the effects of market volatilities on Fulgent Genetics and Cross Country 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 Fulgent Genetics with a short position of Cross Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulgent Genetics and Cross Country.
Diversification Opportunities for Fulgent Genetics and Cross Country
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Fulgent and Cross is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Fulgent Genetics and Cross Country Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cross Country Healthcare and Fulgent Genetics 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 Fulgent Genetics are associated (or correlated) with Cross Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cross Country Healthcare has no effect on the direction of Fulgent Genetics i.e., Fulgent Genetics and Cross Country go up and down completely randomly.
Pair Corralation between Fulgent Genetics and Cross Country
Given the investment horizon of 90 days Fulgent Genetics is expected to generate 0.89 times more return on investment than Cross Country. However, Fulgent Genetics is 1.12 times less risky than Cross Country. It trades about -0.04 of its potential returns per unit of risk. Cross Country Healthcare is currently generating about -0.07 per unit of risk. If you would invest 3,593 in Fulgent Genetics on August 24, 2024 and sell it today you would lose (1,806) from holding Fulgent Genetics or give up 50.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fulgent Genetics vs. Cross Country Healthcare
Performance |
| Timeline |
| Fulgent Genetics |
| Cross Country Healthcare |
Fulgent Genetics and Cross Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fulgent Genetics and Cross Country
The main advantage of trading using opposite Fulgent Genetics and Cross Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulgent Genetics position performs unexpectedly, Cross Country 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 Cross Country will offset losses from the drop in Cross Country's long position.| Fulgent Genetics vs. Illumina | Fulgent Genetics vs. T2 Biosystms | Fulgent Genetics vs. Agilent Technologies | Fulgent Genetics vs. Mettler Toledo International |
| Cross Country vs. ASGN Inc | Cross Country vs. Kforce Inc | Cross Country vs. Kelly Services A | Cross Country vs. AMN Healthcare Services |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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