Correlation Between GE HealthCare and Progyny

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

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

Diversification Opportunities for GE HealthCare and Progyny

-0.12

Correlation Coefficient

GE HealthCare  Progyny

Good diversification

The 3 months correlation between GEHC and Progyny is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding GE HealthCare Technologies and Progyny in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progyny and GE HealthCare 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 GE HealthCare Technologies are associated (or correlated) with Progyny. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progyny has no effect on the direction of GE HealthCare i.e., GE HealthCare and Progyny go up and down completely randomly.

Pair Corralation between GE HealthCare and Progyny

Given the investment horizon of 90 days GE HealthCare Technologies is expected to generate 0.26 times more return on investment than Progyny. However, GE HealthCare Technologies is 3.83 times less risky than Progyny. It trades about -0.02 of its potential returns per unit of risk. Progyny is currently generating about -0.09 per unit of risk. If you would invest  8,477  in GE HealthCare Technologies on September 1, 2024 and sell it today you would lose (177.00) from holding GE HealthCare Technologies or give up 2.09% of portfolio value over 90 days.

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

GE HealthCare Technologies  vs.  Progyny

GE HealthCare Techno

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GE HealthCare Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, GE HealthCare is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Progyny

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Progyny has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with GE HealthCare and Progyny

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

The idea behind GE HealthCare Technologies and Progyny 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.