Correlation Between GE HealthCare and AI/ML Innovations
Can any of the company-specific risk be diversified away by investing in both GE HealthCare and AI/ML Innovations 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 GE HealthCare and AI/ML Innovations into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GE HealthCare Technologies and AIML Innovations, you can compare the effects of market volatilities on GE HealthCare and AI/ML Innovations 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 GE HealthCare with a short position of AI/ML Innovations. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE HealthCare and AI/ML Innovations.
Diversification Opportunities for GE HealthCare and AI/ML Innovations
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GEHC and AI/ML is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding GE HealthCare Technologies and AIML Innovations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AI/ML Innovations and GE HealthCare 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 GE HealthCare Technologies are associated (or correlated) with AI/ML Innovations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AI/ML Innovations has no effect on the direction of GE HealthCare i.e., GE HealthCare and AI/ML Innovations go up and down completely randomly.
Pair Corralation between GE HealthCare and AI/ML Innovations
Given the investment horizon of 90 days GE HealthCare Technologies is expected to generate 0.14 times more return on investment than AI/ML Innovations. However, GE HealthCare Technologies is 7.15 times less risky than AI/ML Innovations. It trades about -0.15 of its potential returns per unit of risk. AIML Innovations is currently generating about -0.02 per unit of risk. If you would invest 8,735 in GE HealthCare Technologies on September 1, 2024 and sell it today you would lose (413.00) from holding GE HealthCare Technologies or give up 4.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GE HealthCare Technologies vs. AIML Innovations
Performance |
| Timeline |
| GE HealthCare Techno |
| AI/ML Innovations |
GE HealthCare and AI/ML Innovations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE HealthCare and AI/ML Innovations
The main advantage of trading using opposite GE HealthCare and AI/ML Innovations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE HealthCare position performs unexpectedly, AI/ML Innovations 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 AI/ML Innovations will offset losses from the drop in AI/ML Innovations' long position.| GE HealthCare vs. Profound Medical Corp | GE HealthCare vs. Si Bone | GE HealthCare vs. Nevro Corp | GE HealthCare vs. Paragon 28 |
| AI/ML Innovations vs. GE HealthCare Technologies | AI/ML Innovations vs. Veeva Systems Class | AI/ML Innovations vs. Solventum Corp | AI/ML Innovations vs. Doximity |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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