Correlation Between Nevro Corp and GE HealthCare
Can any of the company-specific risk be diversified away by investing in both Nevro Corp and GE HealthCare 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 Nevro Corp and GE HealthCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nevro Corp and GE HealthCare Technologies, you can compare the effects of market volatilities on Nevro Corp and GE HealthCare 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 Nevro Corp with a short position of GE HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nevro Corp and GE HealthCare.
Diversification Opportunities for Nevro Corp and GE HealthCare
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nevro and GEHC is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nevro Corp and GE HealthCare Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE HealthCare Techno and Nevro Corp 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 Nevro Corp are associated (or correlated) with GE HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE HealthCare Techno has no effect on the direction of Nevro Corp i.e., Nevro Corp and GE HealthCare go up and down completely randomly.
Pair Corralation between Nevro Corp and GE HealthCare
Given the investment horizon of 90 days Nevro Corp is expected to generate 2.89 times more return on investment than GE HealthCare. However, Nevro Corp is 2.89 times more volatile than GE HealthCare Technologies. It trades about 0.12 of its potential returns per unit of risk. GE HealthCare Technologies is currently generating about 0.06 per unit of risk. If you would invest 427.00 in Nevro Corp on December 1, 2024 and sell it today you would earn a total of 145.00 from holding Nevro Corp or generate 33.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Nevro Corp vs. GE HealthCare Technologies
Performance |
Timeline |
Nevro Corp |
GE HealthCare Techno |
Nevro Corp and GE HealthCare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nevro Corp and GE HealthCare
The main advantage of trading using opposite Nevro Corp and GE HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nevro Corp position performs unexpectedly, GE HealthCare 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 GE HealthCare will offset losses from the drop in GE HealthCare's long position.Nevro Corp vs. Integer Holdings Corp | Nevro Corp vs. Glaukos Corp | Nevro Corp vs. CONMED | Nevro Corp vs. Pulmonx Corp |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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