Correlation Between GeneDx Holdings and Xiaomi Corp

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

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

Diversification Opportunities for GeneDx Holdings and Xiaomi Corp

0.35

Correlation Coefficient

GeneDx Holdings  Xiaomi Corp

Weak diversification

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

Pair Corralation between GeneDx Holdings and Xiaomi Corp

Considering the 90-day investment horizon GeneDx Holdings is expected to generate 16.99 times less return on investment than Xiaomi Corp. In addition to that, GeneDx Holdings is 2.04 times more volatile than Xiaomi Corp. It trades about 0.01 of its total potential returns per unit of risk. Xiaomi Corp is currently generating about 0.22 per unit of volatility. If you would invest  412.00  in Xiaomi Corp on October 24, 2024 and sell it today you would earn a total of  49.00  from holding Xiaomi Corp or generate 11.89% return on investment over 90 days.

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

GeneDx Holdings Corp  vs.  Xiaomi Corp

GeneDx Holdings Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GeneDx Holdings Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, GeneDx Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Xiaomi Corp

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xiaomi Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Xiaomi Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GeneDx Holdings and Xiaomi Corp

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

The idea behind GeneDx Holdings Corp and Xiaomi 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.