Correlation Between GE HealthCare and Surgical Science
Can any of the company-specific risk be diversified away by investing in both GE HealthCare and Surgical Science 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 Surgical Science 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 Surgical Science Sweden, you can compare the effects of market volatilities on GE HealthCare and Surgical Science 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 Surgical Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE HealthCare and Surgical Science.
Diversification Opportunities for GE HealthCare and Surgical Science
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEHC and Surgical is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GE HealthCare Technologies and Surgical Science Sweden in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surgical Science Sweden 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 Surgical Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surgical Science Sweden has no effect on the direction of GE HealthCare i.e., GE HealthCare and Surgical Science go up and down completely randomly.
Pair Corralation between GE HealthCare and Surgical Science
Given the investment horizon of 90 days GE HealthCare Technologies is expected to generate 0.63 times more return on investment than Surgical Science. However, GE HealthCare Technologies is 1.58 times less risky than Surgical Science. It trades about 0.05 of its potential returns per unit of risk. Surgical Science Sweden is currently generating about -0.02 per unit of risk. If you would invest 7,710 in GE HealthCare Technologies on September 1, 2024 and sell it today you would earn a total of 612.00 from holding GE HealthCare Technologies or generate 7.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
GE HealthCare Technologies vs. Surgical Science Sweden
Performance |
| Timeline |
| GE HealthCare Techno |
| Surgical Science Sweden |
GE HealthCare and Surgical Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE HealthCare and Surgical Science
The main advantage of trading using opposite GE HealthCare and Surgical Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE HealthCare position performs unexpectedly, Surgical Science 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 Surgical Science will offset losses from the drop in Surgical Science's long position.| GE HealthCare vs. Profound Medical Corp | GE HealthCare vs. Si Bone | GE HealthCare vs. Nevro Corp | GE HealthCare vs. Paragon 28 |
| Surgical Science vs. Healthcare Integrated Technologies | Surgical Science vs. CompuGroup Medical SE | Surgical Science vs. Cannabiz Mobile | Surgical Science vs. Accelera Innovations |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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