Correlation Between Haleon Plc and GE HealthCare
Can any of the company-specific risk be diversified away by investing in both Haleon Plc and GE HealthCare 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 Haleon Plc and GE HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haleon plc and GE HealthCare Technologies, you can compare the effects of market volatilities on Haleon Plc and GE HealthCare 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 Haleon Plc with a short position of GE HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haleon Plc and GE HealthCare.
Diversification Opportunities for Haleon Plc and GE HealthCare
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haleon and GEHC is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Haleon plc and GE HealthCare Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE HealthCare Techno and Haleon Plc 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 Haleon plc are associated (or correlated) with GE HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE HealthCare Techno has no effect on the direction of Haleon Plc i.e., Haleon Plc and GE HealthCare go up and down completely randomly.
Pair Corralation between Haleon Plc and GE HealthCare
Considering the 90-day investment horizon Haleon plc is expected to under-perform the GE HealthCare. But the stock apears to be less risky and, when comparing its historical volatility, Haleon plc is 1.43 times less risky than GE HealthCare. The stock trades about -0.06 of its potential returns per unit of risk. The GE HealthCare Technologies is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 8,446 in GE HealthCare Technologies on August 24, 2024 and sell it today you would lose (246.00) from holding GE HealthCare Technologies or give up 2.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Haleon plc vs. GE HealthCare Technologies
Performance |
| Timeline |
| Haleon plc |
| GE HealthCare Techno |
Haleon Plc and GE HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haleon Plc and GE HealthCare
The main advantage of trading using opposite Haleon Plc and GE HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haleon Plc position performs unexpectedly, GE HealthCare 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 GE HealthCare will offset losses from the drop in GE HealthCare's long position.| Haleon Plc vs. Teva Pharma Industries | Haleon Plc vs. Bausch Health Companies | Haleon Plc vs. Zoetis Inc | Haleon Plc vs. Takeda Pharmaceutical Co |
| GE HealthCare vs. Teladoc | GE HealthCare vs. Veeva Systems Class | GE HealthCare vs. 10X Genomics | GE HealthCare vs. Progyny |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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