Correlation Between Schrodinger and GE HealthCare
Can any of the company-specific risk be diversified away by investing in both Schrodinger 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 Schrodinger and GE HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schrodinger and GE HealthCare Technologies, you can compare the effects of market volatilities on Schrodinger 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 Schrodinger with a short position of GE HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schrodinger and GE HealthCare.
Diversification Opportunities for Schrodinger and GE HealthCare
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Schrodinger and GEHC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Schrodinger 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 Schrodinger 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 Schrodinger 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 Schrodinger i.e., Schrodinger and GE HealthCare go up and down completely randomly.
Pair Corralation between Schrodinger and GE HealthCare
Given the investment horizon of 90 days Schrodinger is expected to generate 3.56 times more return on investment than GE HealthCare. However, Schrodinger is 3.56 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 -0.51 per unit of risk. If you would invest 2,601 in Schrodinger on December 17, 2024 and sell it today you would lose (311.00) from holding Schrodinger or give up 11.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schrodinger vs. GE HealthCare Technologies
Performance |
| Timeline |
| Schrodinger |
| GE HealthCare Techno |
Schrodinger and GE HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schrodinger and GE HealthCare
The main advantage of trading using opposite Schrodinger and GE HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schrodinger 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.| Schrodinger vs. Veeva Systems Class | ||
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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