Correlation Between Teladoc and GE HealthCare
Can any of the company-specific risk be diversified away by investing in both Teladoc 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 Teladoc and GE HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teladoc and GE HealthCare Technologies, you can compare the effects of market volatilities on Teladoc 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 Teladoc with a short position of GE HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladoc and GE HealthCare.
Diversification Opportunities for Teladoc and GE HealthCare
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Teladoc and GEHC is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Teladoc 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 Teladoc 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 Teladoc 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 Teladoc i.e., Teladoc and GE HealthCare go up and down completely randomly.
Pair Corralation between Teladoc and GE HealthCare
Given the investment horizon of 90 days Teladoc is expected to generate 1.7 times more return on investment than GE HealthCare. However, Teladoc is 1.7 times more volatile than GE HealthCare Technologies. It trades about 0.28 of its potential returns per unit of risk. GE HealthCare Technologies is currently generating about 0.42 per unit of risk. If you would invest 909.00 in Teladoc on November 1, 2024 and sell it today you would earn a total of 126.00 from holding Teladoc or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teladoc vs. GE HealthCare Technologies
Performance |
| Timeline |
| Teladoc |
| GE HealthCare Techno |
Teladoc and GE HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teladoc and GE HealthCare
The main advantage of trading using opposite Teladoc and GE HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladoc 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.| Teladoc vs. Veeva Systems Class | Teladoc vs. 10X Genomics | Teladoc vs. GE HealthCare Technologies | Teladoc vs. Progyny |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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