Correlation Between Omnicell and GE HealthCare
Can any of the company-specific risk be diversified away by investing in both Omnicell 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 Omnicell and GE HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Omnicell and GE HealthCare Technologies, you can compare the effects of market volatilities on Omnicell 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 Omnicell with a short position of GE HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Omnicell and GE HealthCare.
Diversification Opportunities for Omnicell and GE HealthCare
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Omnicell and GEHC is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Omnicell 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 Omnicell 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 Omnicell 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 Omnicell i.e., Omnicell and GE HealthCare go up and down completely randomly.
Pair Corralation between Omnicell and GE HealthCare
Given the investment horizon of 90 days Omnicell is expected to generate 3.6 times more return on investment than GE HealthCare. However, Omnicell is 3.6 times more volatile than GE HealthCare Technologies. It trades about 0.09 of its potential returns per unit of risk. GE HealthCare Technologies is currently generating about 0.05 per unit of risk. If you would invest 3,053 in Omnicell on September 3, 2024 and sell it today you would earn a total of 1,708 from holding Omnicell or generate 55.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Omnicell vs. GE HealthCare Technologies
Performance |
| Timeline |
| Omnicell |
| GE HealthCare Techno |
Omnicell and GE HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Omnicell and GE HealthCare
The main advantage of trading using opposite Omnicell and GE HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Omnicell 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.| Omnicell vs. HealthStream | Omnicell vs. National Research Corp | Omnicell vs. Forian Inc | Omnicell vs. Definitive Healthcare Corp |
| 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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