Correlation Between Graham Holdings and RadNet
Can any of the company-specific risk be diversified away by investing in both Graham Holdings and RadNet 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 Graham Holdings and RadNet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graham Holdings Co and RadNet Inc, you can compare the effects of market volatilities on Graham Holdings and RadNet 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 Graham Holdings with a short position of RadNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and RadNet.
Diversification Opportunities for Graham Holdings and RadNet
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Graham and RadNet is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and RadNet Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RadNet Inc and Graham Holdings 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 Graham Holdings Co are associated (or correlated) with RadNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RadNet Inc has no effect on the direction of Graham Holdings i.e., Graham Holdings and RadNet go up and down completely randomly.
Pair Corralation between Graham Holdings and RadNet
Considering the 90-day investment horizon Graham Holdings is expected to generate 1.91 times less return on investment than RadNet. But when comparing it to its historical volatility, Graham Holdings Co is 1.39 times less risky than RadNet. It trades about 0.07 of its potential returns per unit of risk. RadNet Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,781 in RadNet Inc on October 12, 2024 and sell it today you would earn a total of 2,444 from holding RadNet Inc or generate 51.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graham Holdings Co vs. RadNet Inc
Performance |
| Timeline |
| Graham Holdings |
| RadNet Inc |
Graham Holdings and RadNet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graham Holdings and RadNet
The main advantage of trading using opposite Graham Holdings and RadNet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham Holdings position performs unexpectedly, RadNet 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 RadNet will offset losses from the drop in RadNet's long position.| Graham Holdings vs. Cable One | Graham Holdings vs. Adtalem Global Education | Graham Holdings vs. Axalta Coating Systems | Graham Holdings vs. Madison Square Garden |
| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |