Correlation Between Varex Imaging and Fulgent Genetics
Can any of the company-specific risk be diversified away by investing in both Varex Imaging and Fulgent Genetics 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 Fulgent Genetics 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 Fulgent Genetics, you can compare the effects of market volatilities on Varex Imaging and Fulgent Genetics 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 Fulgent Genetics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Varex Imaging and Fulgent Genetics.
Diversification Opportunities for Varex Imaging and Fulgent Genetics
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Varex and Fulgent is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Varex Imaging Corp and Fulgent Genetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fulgent Genetics 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 Fulgent Genetics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fulgent Genetics has no effect on the direction of Varex Imaging i.e., Varex Imaging and Fulgent Genetics go up and down completely randomly.
Pair Corralation between Varex Imaging and Fulgent Genetics
Given the investment horizon of 90 days Varex Imaging Corp is expected to generate 0.7 times more return on investment than Fulgent Genetics. However, Varex Imaging Corp is 1.42 times less risky than Fulgent Genetics. It trades about 0.39 of its potential returns per unit of risk. Fulgent Genetics is currently generating about -0.08 per unit of risk. If you would invest 1,315 in Varex Imaging Corp on August 27, 2024 and sell it today you would earn a total of 324.00 from holding Varex Imaging Corp or generate 24.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Varex Imaging Corp vs. Fulgent Genetics
Performance |
| Timeline |
| Varex Imaging Corp |
| Fulgent Genetics |
Varex Imaging and Fulgent Genetics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Varex Imaging and Fulgent Genetics
The main advantage of trading using opposite Varex Imaging and Fulgent Genetics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Varex Imaging position performs unexpectedly, Fulgent Genetics 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 Fulgent Genetics will offset losses from the drop in Fulgent Genetics' long position.| Varex Imaging vs. Sight Sciences | Varex Imaging vs. Apyx Medical | Varex Imaging vs. Si Bone | Varex Imaging vs. Iradimed Co |
| Fulgent Genetics vs. Illumina | Fulgent Genetics vs. T2 Biosystms | Fulgent Genetics vs. Agilent Technologies | Fulgent Genetics vs. Mettler Toledo International |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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