Correlation Between NYSE Composite and Genesis Healthcare
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Genesis 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 NYSE Composite and Genesis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Genesis Healthcare, you can compare the effects of market volatilities on NYSE Composite and Genesis 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 NYSE Composite with a short position of Genesis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Genesis Healthcare.
Diversification Opportunities for NYSE Composite and Genesis Healthcare
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Genesis is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Genesis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Healthcare and NYSE Composite 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 NYSE Composite are associated (or correlated) with Genesis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Healthcare has no effect on the direction of NYSE Composite i.e., NYSE Composite and Genesis Healthcare go up and down completely randomly.
Pair Corralation between NYSE Composite and Genesis Healthcare
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.58 times less return on investment than Genesis Healthcare. In addition to that, NYSE Composite is 1.57 times more volatile than Genesis Healthcare. It trades about 0.08 of its total potential returns per unit of risk. Genesis Healthcare is currently generating about 0.45 per unit of volatility. If you would invest 1.11 in Genesis Healthcare on August 30, 2024 and sell it today you would earn a total of 0.10 from holding Genesis Healthcare or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.28% |
| Values | Daily Returns |
NYSE Composite vs. Genesis Healthcare
Performance |
| Timeline |
NYSE Composite and Genesis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Genesis Healthcare
Pair trading matchups for Genesis Healthcare
Pair Trading with NYSE Composite and Genesis Healthcare
The main advantage of trading using opposite NYSE Composite and Genesis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Genesis 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 Genesis Healthcare will offset losses from the drop in Genesis Healthcare's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Genesis Healthcare vs. Univec Inc | Genesis Healthcare vs. Ethema Health Corp | Genesis Healthcare vs. IMAC Holdings | Genesis Healthcare vs. The Ensign Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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