Correlation Between GE HealthCare and Signify Health

Can any of the company-specific risk be diversified away by investing in both GE HealthCare and Signify Health 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 GE HealthCare and Signify Health into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GE HealthCare Technologies and Signify Health, you can compare the effects of market volatilities on GE HealthCare and Signify Health 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 GE HealthCare with a short position of Signify Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of GE HealthCare and Signify Health.

Diversification Opportunities for GE HealthCare and Signify Health

0.0

Correlation Coefficient

GE HealthCare  Signify Health

Pay attention - limited upside

The 3 months correlation between GEHC and Signify is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GE HealthCare Technologies and Signify Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signify Health and GE HealthCare 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 GE HealthCare Technologies are associated (or correlated) with Signify Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signify Health has no effect on the direction of GE HealthCare i.e., GE HealthCare and Signify Health go up and down completely randomly.

Pair Corralation between GE HealthCare and Signify Health

If you would invest  7,857  in GE HealthCare Technologies on December 28, 2024 and sell it today you would earn a total of  309.00  from holding GE HealthCare Technologies or generate 3.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GE HealthCare Technologies  vs.  Signify Health

GE HealthCare Techno

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GE HealthCare Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, GE HealthCare is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Signify Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Signify Health has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Signify Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GE HealthCare and Signify Health

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

The idea behind GE HealthCare Technologies and Signify Health 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.