Correlation Between Aluminumof China and GUARDANT HEALTH
Can any of the company-specific risk be diversified away by investing in both Aluminumof China and GUARDANT HEALTH 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 Aluminumof China and GUARDANT HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and GUARDANT HEALTH CL, you can compare the effects of market volatilities on Aluminumof China and GUARDANT HEALTH 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 Aluminumof China with a short position of GUARDANT HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and GUARDANT HEALTH.
Diversification Opportunities for Aluminumof China and GUARDANT HEALTH
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aluminumof and GUARDANT is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and GUARDANT HEALTH CL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUARDANT HEALTH CL and Aluminumof China 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 Aluminum of are associated (or correlated) with GUARDANT HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUARDANT HEALTH CL has no effect on the direction of Aluminumof China i.e., Aluminumof China and GUARDANT HEALTH go up and down completely randomly.
Pair Corralation between Aluminumof China and GUARDANT HEALTH
Assuming the 90 days horizon Aluminum of is expected to generate 0.85 times more return on investment than GUARDANT HEALTH. However, Aluminum of is 1.17 times less risky than GUARDANT HEALTH. It trades about 0.06 of its potential returns per unit of risk. GUARDANT HEALTH CL is currently generating about 0.03 per unit of risk. If you would invest 26.00 in Aluminum of on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Aluminum of or generate 119.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. GUARDANT HEALTH CL
Performance |
| Timeline |
| Aluminumof China |
| GUARDANT HEALTH CL |
Aluminumof China and GUARDANT HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and GUARDANT HEALTH
The main advantage of trading using opposite Aluminumof China and GUARDANT HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China position performs unexpectedly, GUARDANT HEALTH 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 GUARDANT HEALTH will offset losses from the drop in GUARDANT HEALTH's long position.| Aluminumof China vs. Norsk Hydro ASA | Aluminumof China vs. Kaiser Aluminum | Aluminumof China vs. Superior Plus Corp | Aluminumof China vs. SIVERS SEMICONDUCTORS AB |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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