Correlation Between GUARDANT HEALTH and LANSON BCC
Can any of the company-specific risk be diversified away by investing in both GUARDANT HEALTH and LANSON BCC 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 LANSON BCC 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 LANSON BCC INH EO, you can compare the effects of market volatilities on GUARDANT HEALTH and LANSON BCC 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 LANSON BCC. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARDANT HEALTH and LANSON BCC.
Diversification Opportunities for GUARDANT HEALTH and LANSON BCC
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GUARDANT and LANSON is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL and LANSON BCC INH EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANSON BCC INH 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 LANSON BCC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANSON BCC INH has no effect on the direction of GUARDANT HEALTH i.e., GUARDANT HEALTH and LANSON BCC go up and down completely randomly.
Pair Corralation between GUARDANT HEALTH and LANSON BCC
Assuming the 90 days horizon GUARDANT HEALTH CL is expected to generate 2.28 times more return on investment than LANSON BCC. However, GUARDANT HEALTH is 2.28 times more volatile than LANSON BCC INH EO. It trades about 0.26 of its potential returns per unit of risk. LANSON BCC INH EO is currently generating about -0.2 per unit of risk. If you would invest 2,739 in GUARDANT HEALTH CL on September 13, 2024 and sell it today you would earn a total of 680.00 from holding GUARDANT HEALTH CL or generate 24.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUARDANT HEALTH CL vs. LANSON BCC INH EO
Performance |
| Timeline |
| GUARDANT HEALTH CL |
| LANSON BCC INH |
GUARDANT HEALTH and LANSON BCC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUARDANT HEALTH and LANSON BCC
The main advantage of trading using opposite GUARDANT HEALTH and LANSON BCC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUARDANT HEALTH position performs unexpectedly, LANSON BCC 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 LANSON BCC will offset losses from the drop in LANSON BCC's long position.| GUARDANT HEALTH vs. DexCom Inc | GUARDANT HEALTH vs. IDEXX Laboratories | GUARDANT HEALTH vs. Superior Plus Corp | GUARDANT HEALTH vs. NMI Holdings |
| LANSON BCC vs. Safety Insurance Group | LANSON BCC vs. QBE Insurance Group | LANSON BCC vs. INSURANCE AUST GRP | LANSON BCC vs. GUARDANT HEALTH CL |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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