Correlation Between Varex Imaging and DocGo
Can any of the company-specific risk be diversified away by investing in both Varex Imaging and DocGo 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 Varex Imaging and DocGo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Varex Imaging Corp and DocGo Inc, you can compare the effects of market volatilities on Varex Imaging and DocGo 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 Varex Imaging with a short position of DocGo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varex Imaging and DocGo.
Diversification Opportunities for Varex Imaging and DocGo
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Varex and DocGo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and DocGo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DocGo Inc and Varex Imaging 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 Varex Imaging Corp are associated (or correlated) with DocGo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DocGo Inc has no effect on the direction of Varex Imaging i.e., Varex Imaging and DocGo go up and down completely randomly.
Pair Corralation between Varex Imaging and DocGo
Given the investment horizon of 90 days Varex Imaging Corp is expected to generate 0.79 times more return on investment than DocGo. However, Varex Imaging Corp is 1.26 times less risky than DocGo. It trades about 0.43 of its potential returns per unit of risk. DocGo Inc is currently generating about 0.31 per unit of risk. If you would invest 1,313 in Varex Imaging Corp on September 1, 2024 and sell it today you would earn a total of 355.00 from holding Varex Imaging Corp or generate 27.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Varex Imaging Corp vs. DocGo Inc
Performance |
| Timeline |
| Varex Imaging Corp |
| DocGo Inc |
Varex Imaging and DocGo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varex Imaging and DocGo
The main advantage of trading using opposite Varex Imaging and DocGo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varex Imaging position performs unexpectedly, DocGo 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 DocGo will offset losses from the drop in DocGo's long position.| Varex Imaging vs. Sight Sciences | Varex Imaging vs. Apyx Medical | Varex Imaging vs. Si Bone | Varex Imaging vs. Iradimed Co |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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