Correlation Between GUARDANT HEALTH and LyondellBasell Industries
Can any of the company-specific risk be diversified away by investing in both GUARDANT HEALTH and LyondellBasell Industries 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 LyondellBasell Industries 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 LyondellBasell Industries NV, you can compare the effects of market volatilities on GUARDANT HEALTH and LyondellBasell Industries 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 LyondellBasell Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARDANT HEALTH and LyondellBasell Industries.
Diversification Opportunities for GUARDANT HEALTH and LyondellBasell Industries
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GUARDANT and LyondellBasell is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL and LyondellBasell Industries NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LyondellBasell Industries 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 LyondellBasell Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LyondellBasell Industries has no effect on the direction of GUARDANT HEALTH i.e., GUARDANT HEALTH and LyondellBasell Industries go up and down completely randomly.
Pair Corralation between GUARDANT HEALTH and LyondellBasell Industries
Assuming the 90 days horizon GUARDANT HEALTH CL is expected to generate 2.62 times more return on investment than LyondellBasell Industries. However, GUARDANT HEALTH is 2.62 times more volatile than LyondellBasell Industries NV. It trades about 0.03 of its potential returns per unit of risk. LyondellBasell Industries NV is currently generating about 0.01 per unit of risk. If you would invest 2,602 in GUARDANT HEALTH CL on September 15, 2024 and sell it today you would earn a total of 739.00 from holding GUARDANT HEALTH CL or generate 28.4% 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. LyondellBasell Industries NV
Performance |
| Timeline |
| GUARDANT HEALTH CL |
| LyondellBasell Industries |
GUARDANT HEALTH and LyondellBasell Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUARDANT HEALTH and LyondellBasell Industries
The main advantage of trading using opposite GUARDANT HEALTH and LyondellBasell Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUARDANT HEALTH position performs unexpectedly, LyondellBasell Industries 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 LyondellBasell Industries will offset losses from the drop in LyondellBasell Industries' long position.| GUARDANT HEALTH vs. DexCom Inc | GUARDANT HEALTH vs. IDEXX Laboratories | GUARDANT HEALTH vs. Superior Plus Corp | GUARDANT HEALTH vs. NMI Holdings |
| LyondellBasell Industries vs. CHINA TELECOM H | LyondellBasell Industries vs. GRIFFIN MINING LTD | LyondellBasell Industries vs. MAROC TELECOM | LyondellBasell Industries vs. CITIC Telecom International |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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