Correlation Between Ultimate Sports and GE HealthCare
Can any of the company-specific risk be diversified away by investing in both Ultimate Sports 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 Ultimate Sports and GE HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ultimate Sports and GE HealthCare Technologies, you can compare the effects of market volatilities on Ultimate Sports 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 Ultimate Sports with a short position of GE HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ultimate Sports and GE HealthCare.
Diversification Opportunities for Ultimate Sports and GE HealthCare
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ultimate and GEHC is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ultimate Sports 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 Ultimate Sports 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 Ultimate Sports 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 Ultimate Sports i.e., Ultimate Sports and GE HealthCare go up and down completely randomly.
Pair Corralation between Ultimate Sports and GE HealthCare
Given the investment horizon of 90 days Ultimate Sports is expected to generate 2.22 times more return on investment than GE HealthCare. However, Ultimate Sports is 2.22 times more volatile than GE HealthCare Technologies. It trades about 0.21 of its potential returns per unit of risk. GE HealthCare Technologies is currently generating about -0.13 per unit of risk. If you would invest 0.45 in Ultimate Sports on September 13, 2024 and sell it today you would earn a total of 0.06 from holding Ultimate Sports or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ultimate Sports vs. GE HealthCare Technologies
Performance |
| Timeline |
| Ultimate Sports |
| GE HealthCare Techno |
Ultimate Sports and GE HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ultimate Sports and GE HealthCare
The main advantage of trading using opposite Ultimate Sports and GE HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ultimate Sports 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.| Ultimate Sports vs. Renalytix AI | Ultimate Sports vs. Forian Inc | Ultimate Sports vs. Progyny | Ultimate Sports vs. Veeva Systems Class |
| 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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