Correlation Between Fulgent Genetics and ATI Physical

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

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

Diversification Opportunities for Fulgent Genetics and ATI Physical

0.68

Correlation Coefficient

Fulgent Genetics  ATI Physical

Poor diversification

The 3 months correlation between Fulgent and ATI is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Fulgent Genetics and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy and Fulgent Genetics 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 Fulgent Genetics are associated (or correlated) with ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of Fulgent Genetics i.e., Fulgent Genetics and ATI Physical go up and down completely randomly.

Pair Corralation between Fulgent Genetics and ATI Physical

Given the investment horizon of 90 days Fulgent Genetics is expected to generate 0.41 times more return on investment than ATI Physical. However, Fulgent Genetics is 2.44 times less risky than ATI Physical. It trades about -0.09 of its potential returns per unit of risk. ATI Physical Therapy is currently generating about -0.28 per unit of risk. If you would invest  2,184  in Fulgent Genetics on September 3, 2024 and sell it today you would lose (354.00) from holding Fulgent Genetics or give up 16.21% of portfolio value over 90 days.

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

Fulgent Genetics  vs.  ATI Physical Therapy

Fulgent Genetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fulgent Genetics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ATI Physical Therapy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fulgent Genetics and ATI Physical

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

The idea behind Fulgent Genetics and ATI Physical Therapy 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 Stocks Directory module to find actively traded stocks across global markets.