Correlation Between GUARDANT HEALTH and NEXA RESOURCES
Can any of the company-specific risk be diversified away by investing in both GUARDANT HEALTH and NEXA RESOURCES 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 NEXA RESOURCES 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 NEXA RESOURCES SA, you can compare the effects of market volatilities on GUARDANT HEALTH and NEXA RESOURCES 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 NEXA RESOURCES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARDANT HEALTH and NEXA RESOURCES.
Diversification Opportunities for GUARDANT HEALTH and NEXA RESOURCES
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GUARDANT and NEXA is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL and NEXA RESOURCES SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXA RESOURCES SA 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 NEXA RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXA RESOURCES SA has no effect on the direction of GUARDANT HEALTH i.e., GUARDANT HEALTH and NEXA RESOURCES go up and down completely randomly.
Pair Corralation between GUARDANT HEALTH and NEXA RESOURCES
Assuming the 90 days horizon GUARDANT HEALTH CL is expected to generate 2.14 times more return on investment than NEXA RESOURCES. However, GUARDANT HEALTH is 2.14 times more volatile than NEXA RESOURCES SA. It trades about 0.05 of its potential returns per unit of risk. NEXA RESOURCES SA is currently generating about 0.06 per unit of risk. If you would invest 2,580 in GUARDANT HEALTH CL on September 12, 2024 and sell it today you would earn a total of 899.00 from holding GUARDANT HEALTH CL or generate 34.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUARDANT HEALTH CL vs. NEXA RESOURCES SA
Performance |
| Timeline |
| GUARDANT HEALTH CL |
| NEXA RESOURCES SA |
GUARDANT HEALTH and NEXA RESOURCES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUARDANT HEALTH and NEXA RESOURCES
The main advantage of trading using opposite GUARDANT HEALTH and NEXA RESOURCES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUARDANT HEALTH position performs unexpectedly, NEXA RESOURCES 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 NEXA RESOURCES will offset losses from the drop in NEXA RESOURCES's long position.| GUARDANT HEALTH vs. DexCom Inc | GUARDANT HEALTH vs. IDEXX Laboratories | GUARDANT HEALTH vs. Superior Plus Corp | GUARDANT HEALTH vs. NMI Holdings |
| NEXA RESOURCES vs. DXC Technology Co | NEXA RESOURCES vs. SMA Solar Technology | NEXA RESOURCES vs. EAST SIDE GAMES | NEXA RESOURCES vs. MACOM Technology Solutions |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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