Correlation Between Outset Medical and Fulgent Genetics
Can any of the company-specific risk be diversified away by investing in both Outset Medical and Fulgent Genetics 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 Outset Medical and Fulgent Genetics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Outset Medical and Fulgent Genetics, you can compare the effects of market volatilities on Outset Medical and Fulgent Genetics 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 Outset Medical with a short position of Fulgent Genetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Outset Medical and Fulgent Genetics.
Diversification Opportunities for Outset Medical and Fulgent Genetics
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Outset and Fulgent is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Outset Medical and Fulgent Genetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Genetics and Outset Medical 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 Outset Medical are associated (or correlated) with Fulgent Genetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Genetics has no effect on the direction of Outset Medical i.e., Outset Medical and Fulgent Genetics go up and down completely randomly.
Pair Corralation between Outset Medical and Fulgent Genetics
Allowing for the 90-day total investment horizon Outset Medical is expected to generate 1.96 times more return on investment than Fulgent Genetics. However, Outset Medical is 1.96 times more volatile than Fulgent Genetics. It trades about 0.31 of its potential returns per unit of risk. Fulgent Genetics is currently generating about -0.11 per unit of risk. If you would invest 54.00 in Outset Medical on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Outset Medical or generate 59.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Outset Medical vs. Fulgent Genetics
Performance |
| Timeline |
| Outset Medical |
| Fulgent Genetics |
Outset Medical and Fulgent Genetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Outset Medical and Fulgent Genetics
The main advantage of trading using opposite Outset Medical and Fulgent Genetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Outset Medical position performs unexpectedly, Fulgent Genetics 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 Fulgent Genetics will offset losses from the drop in Fulgent Genetics' long position.| Outset Medical vs. Inari Medical | Outset Medical vs. Clearpoint Neuro | Outset Medical vs. Inspire Medical Systems | Outset Medical vs. Nevro Corp |
| Fulgent Genetics vs. Quest Diagnostics Incorporated | Fulgent Genetics vs. Waters | Fulgent Genetics vs. Universal Health Services | Fulgent Genetics vs. Humana Inc |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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