Correlation Between GE HealthCare and Warner Bros
Can any of the company-specific risk be diversified away by investing in both GE HealthCare and Warner Bros 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 Warner Bros 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 Warner Bros Discovery, you can compare the effects of market volatilities on GE HealthCare and Warner Bros 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 Warner Bros. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE HealthCare and Warner Bros.
Diversification Opportunities for GE HealthCare and Warner Bros
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GEHC and Warner is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding GE HealthCare Technologies and Warner Bros Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warner Bros Discovery 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 Warner Bros. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warner Bros Discovery has no effect on the direction of GE HealthCare i.e., GE HealthCare and Warner Bros go up and down completely randomly.
Pair Corralation between GE HealthCare and Warner Bros
Given the investment horizon of 90 days GE HealthCare Technologies is expected to under-perform the Warner Bros. But the stock apears to be less risky and, when comparing its historical volatility, GE HealthCare Technologies is 2.16 times less risky than Warner Bros. The stock trades about -0.24 of its potential returns per unit of risk. The Warner Bros Discovery is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 733.00 in Warner Bros Discovery on August 24, 2024 and sell it today you would earn a total of 290.00 from holding Warner Bros Discovery or generate 39.56% 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. Warner Bros Discovery
Performance |
| Timeline |
| GE HealthCare Techno |
| Warner Bros Discovery |
GE HealthCare and Warner Bros Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GE HealthCare and Warner Bros
The main advantage of trading using opposite GE HealthCare and Warner Bros positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GE HealthCare position performs unexpectedly, Warner Bros 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 Warner Bros will offset losses from the drop in Warner Bros' long position.| GE HealthCare vs. Teladoc | GE HealthCare vs. Veeva Systems Class | GE HealthCare vs. 10X Genomics | GE HealthCare vs. Progyny |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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