Correlation Between RadNet and Bayer AG
Can any of the company-specific risk be diversified away by investing in both RadNet and Bayer AG 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 RadNet and Bayer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RadNet Inc and Bayer AG, you can compare the effects of market volatilities on RadNet and Bayer AG 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 RadNet with a short position of Bayer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of RadNet and Bayer AG.
Diversification Opportunities for RadNet and Bayer AG
Good diversification
The 3 months correlation between RadNet and Bayer is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Bayer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayer AG and RadNet 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 RadNet Inc are associated (or correlated) with Bayer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayer AG has no effect on the direction of RadNet i.e., RadNet and Bayer AG go up and down completely randomly.
Pair Corralation between RadNet and Bayer AG
Given the investment horizon of 90 days RadNet Inc is expected to under-perform the Bayer AG. In addition to that, RadNet is 1.54 times more volatile than Bayer AG. It trades about -0.18 of its total potential returns per unit of risk. Bayer AG is currently generating about 0.2 per unit of volatility. If you would invest 2,034 in Bayer AG on November 9, 2024 and sell it today you would earn a total of 156.00 from holding Bayer AG or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RadNet Inc vs. Bayer AG
Performance |
| Timeline |
| RadNet Inc |
| Bayer AG |
RadNet and Bayer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RadNet and Bayer AG
The main advantage of trading using opposite RadNet and Bayer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RadNet position performs unexpectedly, Bayer AG 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 Bayer AG will offset losses from the drop in Bayer AG's long position.| RadNet vs. Sotera Health Co | RadNet vs. Neogen | RadNet vs. Myriad Genetics | RadNet vs. bioAffinity Technologies Warrant |
| Bayer AG vs. Union Pacific | Bayer AG vs. 51Talk Online Education | Bayer AG vs. Ihuman Inc | Bayer AG vs. Weibo Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |