Correlation Between GE HealthCare and Schrodinger
Can any of the company-specific risk be diversified away by investing in both GE HealthCare and Schrodinger 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 Schrodinger 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 Schrodinger, you can compare the effects of market volatilities on GE HealthCare and Schrodinger 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 Schrodinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE HealthCare and Schrodinger.
Diversification Opportunities for GE HealthCare and Schrodinger
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GEHC and Schrodinger is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding GE HealthCare Technologies and Schrodinger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schrodinger 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 Schrodinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schrodinger has no effect on the direction of GE HealthCare i.e., GE HealthCare and Schrodinger go up and down completely randomly.
Pair Corralation between GE HealthCare and Schrodinger
Given the investment horizon of 90 days GE HealthCare Technologies is expected to under-perform the Schrodinger. But the stock apears to be less risky and, when comparing its historical volatility, GE HealthCare Technologies is 3.56 times less risky than Schrodinger. The stock trades about -0.51 of its potential returns per unit of risk. The Schrodinger is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 2,601 in Schrodinger on December 17, 2024 and sell it today you would lose (311.00) from holding Schrodinger or give up 11.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GE HealthCare Technologies vs. Schrodinger
Performance |
| Timeline |
| GE HealthCare Techno |
| Schrodinger |
GE HealthCare and Schrodinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE HealthCare and Schrodinger
The main advantage of trading using opposite GE HealthCare and Schrodinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE HealthCare position performs unexpectedly, Schrodinger 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 Schrodinger will offset losses from the drop in Schrodinger's long position.| GE HealthCare vs. Teladoc | ||
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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