Correlation Between RadNet and Danaher

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

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

Diversification Opportunities for RadNet and Danaher

-0.57

Correlation Coefficient

RadNet  Danaher

Excellent diversification

The 3 months correlation between RadNet and Danaher is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Danaher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Danaher and RadNet 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 RadNet Inc are associated (or correlated) with Danaher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Danaher has no effect on the direction of RadNet i.e., RadNet and Danaher go up and down completely randomly.

Pair Corralation between RadNet and Danaher

Given the investment horizon of 90 days RadNet Inc is expected to under-perform the Danaher. In addition to that, RadNet is 1.95 times more volatile than Danaher. It trades about -0.24 of its total potential returns per unit of risk. Danaher is currently generating about 0.16 per unit of volatility. If you would invest  22,760  in Danaher on October 6, 2024 and sell it today you would earn a total of  724.00  from holding Danaher or generate 3.18% return on investment over 90 days.

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

RadNet Inc  vs.  Danaher

RadNet Inc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in RadNet Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, RadNet may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Danaher

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Danaher has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with RadNet and Danaher

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

The idea behind RadNet Inc and Danaher 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.