Correlation Between G Medical and Predictive Oncology

Can any of the company-specific risk be diversified away by investing in both G Medical and Predictive Oncology 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 G Medical and Predictive Oncology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between G Medical Innovations and Predictive Oncology, you can compare the effects of market volatilities on G Medical and Predictive Oncology 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 G Medical with a short position of Predictive Oncology. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Medical and Predictive Oncology.

Diversification Opportunities for G Medical and Predictive Oncology

0.58

Correlation Coefficient

G Medical  Predictive Oncology

Very weak diversification

The 3 months correlation between GMVD and Predictive is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding G Medical Innovations and Predictive Oncology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Predictive Oncology and G Medical 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 G Medical Innovations are associated (or correlated) with Predictive Oncology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Predictive Oncology has no effect on the direction of G Medical i.e., G Medical and Predictive Oncology go up and down completely randomly.

Pair Corralation between G Medical and Predictive Oncology

If you would invest  33.00  in G Medical Innovations on September 3, 2024 and sell it today you would earn a total of  0.00  from holding G Medical Innovations or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

G Medical Innovations  vs.  Predictive Oncology

G Medical Innovations

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Medical Innovations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, G Medical is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Predictive Oncology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Predictive Oncology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Predictive Oncology is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with G Medical and Predictive Oncology

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

The idea behind G Medical Innovations and Predictive Oncology 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.