Correlation Between Sotera Health and Genetron Holdings
Can any of the company-specific risk be diversified away by investing in both Sotera Health and Genetron Holdings 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 Sotera Health and Genetron Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sotera Health Co and Genetron Holdings, you can compare the effects of market volatilities on Sotera Health and Genetron Holdings 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 Sotera Health with a short position of Genetron Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sotera Health and Genetron Holdings.
Diversification Opportunities for Sotera Health and Genetron Holdings
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sotera and Genetron is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sotera Health Co and Genetron Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genetron Holdings and Sotera Health 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 Sotera Health Co are associated (or correlated) with Genetron Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genetron Holdings has no effect on the direction of Sotera Health i.e., Sotera Health and Genetron Holdings go up and down completely randomly.
Pair Corralation between Sotera Health and Genetron Holdings
If you would invest 94.00 in Genetron Holdings on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Genetron Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Sotera Health Co vs. Genetron Holdings
Performance |
| Timeline |
| Sotera Health |
| Genetron Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sotera Health and Genetron Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sotera Health and Genetron Holdings
The main advantage of trading using opposite Sotera Health and Genetron Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sotera Health position performs unexpectedly, Genetron Holdings 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 Genetron Holdings will offset losses from the drop in Genetron Holdings' long position.| Sotera Health vs. Qiagen NV | Sotera Health vs. Aclaris Therapeutics | Sotera Health vs. Neogen | Sotera Health vs. RadNet Inc |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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