Correlation Between Fulgent Genetics and US Physicalrapy

Can any of the company-specific risk be diversified away by investing in both Fulgent Genetics and US Physicalrapy 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 Fulgent Genetics and US Physicalrapy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Fulgent Genetics and US Physicalrapy, you can compare the effects of market volatilities on Fulgent Genetics and US Physicalrapy 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 Fulgent Genetics with a short position of US Physicalrapy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fulgent Genetics and US Physicalrapy.

Diversification Opportunities for Fulgent Genetics and US Physicalrapy

0.32

Correlation Coefficient

Fulgent Genetics  US Physicalrapy

Weak diversification

The 3 months correlation between Fulgent and USPH is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fulgent Genetics and US Physicalrapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physicalrapy and Fulgent Genetics 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 Fulgent Genetics are associated (or correlated) with US Physicalrapy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physicalrapy has no effect on the direction of Fulgent Genetics i.e., Fulgent Genetics and US Physicalrapy go up and down completely randomly.

Pair Corralation between Fulgent Genetics and US Physicalrapy

Given the investment horizon of 90 days Fulgent Genetics is expected to generate 1.77 times more return on investment than US Physicalrapy. However, Fulgent Genetics is 1.77 times more volatile than US Physicalrapy. It trades about -0.04 of its potential returns per unit of risk. US Physicalrapy is currently generating about -0.2 per unit of risk. If you would invest  1,842  in Fulgent Genetics on December 29, 2024 and sell it today you would lose (157.00) from holding Fulgent Genetics or give up 8.52% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fulgent Genetics  vs.  US Physicalrapy

Fulgent Genetics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fulgent Genetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

US Physicalrapy

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Physicalrapy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Fulgent Genetics and US Physicalrapy

The main advantage of trading using opposite Fulgent Genetics and US Physicalrapy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fulgent Genetics position performs unexpectedly, US Physicalrapy 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 US Physicalrapy will offset losses from the drop in US Physicalrapy's long position.

The idea behind Fulgent Genetics and US Physicalrapy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.