Correlation Between RadNet and Gentex

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

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

Diversification Opportunities for RadNet and Gentex

0.35

Correlation Coefficient

RadNet  Gentex

Weak diversification

The 3 months correlation between RadNet and Gentex is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding RadNet Inc and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of RadNet i.e., RadNet and Gentex go up and down completely randomly.

Pair Corralation between RadNet and Gentex

Given the investment horizon of 90 days RadNet Inc is expected to generate 2.1 times more return on investment than Gentex. However, RadNet is 2.1 times more volatile than Gentex. It trades about 0.11 of its potential returns per unit of risk. Gentex is currently generating about -0.03 per unit of risk. If you would invest  3,662  in RadNet Inc on October 6, 2024 and sell it today you would earn a total of  3,489  from holding RadNet Inc or generate 95.28% return on investment over 90 days.

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

RadNet Inc  vs.  Gentex

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.

Gentex

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with RadNet and Gentex

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

The idea behind RadNet Inc and Gentex 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.