Correlation Between Venus Concept and GeneDx Holdings

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

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

Diversification Opportunities for Venus Concept and GeneDx Holdings

-0.33

Correlation Coefficient

Venus Concept  GeneDx Holdings

Very good diversification

The 3 months correlation between Venus and GeneDx is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Venus Concept 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 Venus Concept 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 Venus Concept 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 Venus Concept i.e., Venus Concept and GeneDx Holdings go up and down completely randomly.

Pair Corralation between Venus Concept and GeneDx Holdings

Given the investment horizon of 90 days Venus Concept is expected to generate 5.7 times less return on investment than GeneDx Holdings. But when comparing it to its historical volatility, Venus Concept is 1.07 times less risky than GeneDx Holdings. It trades about 0.01 of its potential returns per unit of risk. GeneDx Holdings Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  16.00  in GeneDx Holdings Corp on December 29, 2024 and sell it today you would earn a total of  0.00  from holding GeneDx Holdings Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Venus Concept  vs.  GeneDx Holdings Corp

Venus Concept

Risk-Adjusted Performance

Very Weak

Over the last 90 days Venus Concept has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very unfluctuating basic indicators, Venus Concept may actually be approaching a critical reversion point that can send shares even higher in April 2025.

GeneDx Holdings Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GeneDx Holdings Corp are ranked lower than 5 (%) 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 Venus Concept and GeneDx Holdings

The main advantage of trading using opposite Venus Concept and GeneDx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Venus Concept 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 Venus Concept 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.