Correlation Between National Research and GE HealthCare
Can any of the company-specific risk be diversified away by investing in both National Research 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 National Research and GE HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Research Corp and GE HealthCare Technologies, you can compare the effects of market volatilities on National Research 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 National Research with a short position of GE HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Research and GE HealthCare.
Diversification Opportunities for National Research and GE HealthCare
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and GEHC is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding National Research Corp 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 National Research 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 National Research Corp 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 National Research i.e., National Research and GE HealthCare go up and down completely randomly.
Pair Corralation between National Research and GE HealthCare
Considering the 90-day investment horizon National Research Corp is expected to generate 2.22 times more return on investment than GE HealthCare. However, National Research is 2.22 times more volatile than GE HealthCare Technologies. It trades about 0.13 of its potential returns per unit of risk. GE HealthCare Technologies is currently generating about -0.14 per unit of risk. If you would invest 1,816 in National Research Corp on September 2, 2024 and sell it today you would earn a total of 150.00 from holding National Research Corp or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Research Corp vs. GE HealthCare Technologies
Performance |
| Timeline |
| National Research Corp |
| GE HealthCare Techno |
National Research and GE HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Research and GE HealthCare
The main advantage of trading using opposite National Research and GE HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Research 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.| National Research vs. Omega Flex | National Research vs. NI Holdings | National Research vs. PC Connection | National Research vs. Northrim BanCorp |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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