Correlation Between GE HealthCare and Medical Cannabis
Can any of the company-specific risk be diversified away by investing in both GE HealthCare and Medical Cannabis 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 Medical Cannabis 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 Medical Cannabis Pay, you can compare the effects of market volatilities on GE HealthCare and Medical Cannabis 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 Medical Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE HealthCare and Medical Cannabis.
Diversification Opportunities for GE HealthCare and Medical Cannabis
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between GEHC and Medical is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GE HealthCare Technologies and Medical Cannabis Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Cannabis Pay 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 Medical Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Cannabis Pay has no effect on the direction of GE HealthCare i.e., GE HealthCare and Medical Cannabis go up and down completely randomly.
Pair Corralation between GE HealthCare and Medical Cannabis
Given the investment horizon of 90 days GE HealthCare Technologies is expected to under-perform the Medical Cannabis. But the stock apears to be less risky and, when comparing its historical volatility, GE HealthCare Technologies is 171.06 times less risky than Medical Cannabis. The stock trades about -0.01 of its potential returns per unit of risk. The Medical Cannabis Pay is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 0.08 in Medical Cannabis Pay on September 3, 2024 and sell it today you would lose (0.07) from holding Medical Cannabis Pay or give up 87.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE HealthCare Technologies vs. Medical Cannabis Pay
Performance |
| Timeline |
| GE HealthCare Techno |
| Medical Cannabis Pay |
GE HealthCare and Medical Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE HealthCare and Medical Cannabis
The main advantage of trading using opposite GE HealthCare and Medical Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE HealthCare position performs unexpectedly, Medical Cannabis 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 Medical Cannabis will offset losses from the drop in Medical Cannabis' long position.| GE HealthCare vs. Teladoc | GE HealthCare vs. Veeva Systems Class | GE HealthCare vs. 10X Genomics | GE HealthCare vs. Progyny |
| Medical Cannabis vs. Nouveau Life Pharmaceuticals | Medical Cannabis vs. PPJ Healthcare Enterprises | Medical Cannabis vs. eWellness Healthcare Corp | Medical Cannabis vs. M3 Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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