Correlation Between Mednax and GeneDx Holdings

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

By analyzing existing cross correlation between Mednax Inc and GeneDx Holdings Corp, you can compare the effects of market volatilities on Mednax and GeneDx Holdings 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 Mednax with a short position of GeneDx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mednax and GeneDx Holdings.

Diversification Opportunities for Mednax and GeneDx Holdings

0.73

Correlation Coefficient

Mednax  GeneDx Holdings

Poor diversification

The 3 months correlation between Mednax and GeneDx is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mednax Inc and GeneDx Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneDx Holdings Corp and Mednax 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 Mednax Inc are associated (or correlated) with GeneDx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneDx Holdings Corp has no effect on the direction of Mednax i.e., Mednax and GeneDx Holdings go up and down completely randomly.

Pair Corralation between Mednax and GeneDx Holdings

Allowing for the 90-day total investment horizon Mednax is expected to generate 6.04 times less return on investment than GeneDx Holdings. But when comparing it to its historical volatility, Mednax Inc is 3.38 times less risky than GeneDx Holdings. It trades about 0.16 of its potential returns per unit of risk. GeneDx Holdings Corp is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  2.70  in GeneDx Holdings Corp on September 2, 2024 and sell it today you would earn a total of  14.30  from holding GeneDx Holdings Corp or generate 529.63% return on investment over 90 days.

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

Mednax Inc  vs.  GeneDx Holdings Corp

Mednax Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mednax Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Mednax exhibited solid returns over the last few months and may actually be approaching a breakup point.

GeneDx Holdings Corp

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GeneDx Holdings Corp are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, GeneDx Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mednax and GeneDx Holdings

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

The idea behind Mednax Inc and GeneDx Holdings Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.