Correlation Between GE HealthCare and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both GE HealthCare and CompuGroup Medical 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 CompuGroup Medical 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 CompuGroup Medical SE, you can compare the effects of market volatilities on GE HealthCare and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE HealthCare and CompuGroup Medical.
Diversification Opportunities for GE HealthCare and CompuGroup Medical
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between GEHC and CompuGroup is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding GE HealthCare Technologies and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of GE HealthCare i.e., GE HealthCare and CompuGroup Medical go up and down completely randomly.
Pair Corralation between GE HealthCare and CompuGroup Medical
Given the investment horizon of 90 days GE HealthCare Technologies is expected to under-perform the CompuGroup Medical. In addition to that, GE HealthCare is 3.1 times more volatile than CompuGroup Medical SE. It trades about -0.14 of its total potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.22 per unit of volatility. If you would invest 1,449 in CompuGroup Medical SE on September 2, 2024 and sell it today you would earn a total of 31.00 from holding CompuGroup Medical SE or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE HealthCare Technologies vs. CompuGroup Medical SE
Performance |
| Timeline |
| GE HealthCare Techno |
| CompuGroup Medical |
GE HealthCare and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE HealthCare and CompuGroup Medical
The main advantage of trading using opposite GE HealthCare and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE HealthCare position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| GE HealthCare vs. Teladoc | GE HealthCare vs. Veeva Systems Class | GE HealthCare vs. 10X Genomics | GE HealthCare vs. Progyny |
| CompuGroup Medical vs. GE HealthCare Technologies | CompuGroup Medical vs. Veeva Systems Class | CompuGroup Medical vs. Solventum Corp | CompuGroup Medical 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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