Correlation Between GUARDANT HEALTH and China Overseas
Can any of the company-specific risk be diversified away by investing in both GUARDANT HEALTH and China Overseas 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 China Overseas 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 China Overseas Land, you can compare the effects of market volatilities on GUARDANT HEALTH and China Overseas 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 China Overseas. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARDANT HEALTH and China Overseas.
Diversification Opportunities for GUARDANT HEALTH and China Overseas
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GUARDANT and China is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL and China Overseas Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Overseas Land 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 China Overseas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Overseas Land has no effect on the direction of GUARDANT HEALTH i.e., GUARDANT HEALTH and China Overseas go up and down completely randomly.
Pair Corralation between GUARDANT HEALTH and China Overseas
Assuming the 90 days horizon GUARDANT HEALTH is expected to generate 1.79 times less return on investment than China Overseas. But when comparing it to its historical volatility, GUARDANT HEALTH CL is 1.27 times less risky than China Overseas. It trades about 0.07 of its potential returns per unit of risk. China Overseas Land is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 98.00 in China Overseas Land on September 3, 2024 and sell it today you would earn a total of 62.00 from holding China Overseas Land or generate 63.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUARDANT HEALTH CL vs. China Overseas Land
Performance |
| Timeline |
| GUARDANT HEALTH CL |
| China Overseas Land |
GUARDANT HEALTH and China Overseas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUARDANT HEALTH and China Overseas
The main advantage of trading using opposite GUARDANT HEALTH and China Overseas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUARDANT HEALTH position performs unexpectedly, China Overseas 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 China Overseas will offset losses from the drop in China Overseas' long position.| GUARDANT HEALTH vs. Thermo Fisher Scientific | GUARDANT HEALTH vs. Danaher | GUARDANT HEALTH vs. Danaher | GUARDANT HEALTH vs. SIEMENS HEALTH ADR050 |
| China Overseas vs. GUARDANT HEALTH CL | China Overseas vs. SHIP HEALTHCARE HLDGINC | China Overseas vs. FEMALE HEALTH | China Overseas vs. USWE SPORTS AB |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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