Correlation Between GUARDANT HEALTH and KAUFMAN ET
Can any of the company-specific risk be diversified away by investing in both GUARDANT HEALTH and KAUFMAN ET 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 GUARDANT HEALTH and KAUFMAN ET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GUARDANT HEALTH CL and KAUFMAN ET BROAD, you can compare the effects of market volatilities on GUARDANT HEALTH and KAUFMAN ET 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 GUARDANT HEALTH with a short position of KAUFMAN ET. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARDANT HEALTH and KAUFMAN ET.
Diversification Opportunities for GUARDANT HEALTH and KAUFMAN ET
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GUARDANT and KAUFMAN is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL and KAUFMAN ET BROAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KAUFMAN ET BROAD and GUARDANT HEALTH 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 GUARDANT HEALTH CL are associated (or correlated) with KAUFMAN ET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KAUFMAN ET BROAD has no effect on the direction of GUARDANT HEALTH i.e., GUARDANT HEALTH and KAUFMAN ET go up and down completely randomly.
Pair Corralation between GUARDANT HEALTH and KAUFMAN ET
Assuming the 90 days horizon GUARDANT HEALTH is expected to generate 1.27 times less return on investment than KAUFMAN ET. In addition to that, GUARDANT HEALTH is 2.18 times more volatile than KAUFMAN ET BROAD. It trades about 0.02 of its total potential returns per unit of risk. KAUFMAN ET BROAD is currently generating about 0.06 per unit of volatility. If you would invest 2,261 in KAUFMAN ET BROAD on September 12, 2024 and sell it today you would earn a total of 899.00 from holding KAUFMAN ET BROAD or generate 39.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUARDANT HEALTH CL vs. KAUFMAN ET BROAD
Performance |
| Timeline |
| GUARDANT HEALTH CL |
| KAUFMAN ET BROAD |
GUARDANT HEALTH and KAUFMAN ET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUARDANT HEALTH and KAUFMAN ET
The main advantage of trading using opposite GUARDANT HEALTH and KAUFMAN ET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUARDANT HEALTH position performs unexpectedly, KAUFMAN ET 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 KAUFMAN ET will offset losses from the drop in KAUFMAN ET's long position.| GUARDANT HEALTH vs. DexCom Inc | GUARDANT HEALTH vs. IDEXX Laboratories | GUARDANT HEALTH vs. Superior Plus Corp | GUARDANT HEALTH vs. NMI Holdings |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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