Correlation Between Danaher and Guardant Health
Can any of the company-specific risk be diversified away by investing in both Danaher 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 Danaher and Guardant Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danaher and Guardant Health, you can compare the effects of market volatilities on Danaher 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 Danaher with a short position of Guardant Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danaher and Guardant Health.
Diversification Opportunities for Danaher and Guardant Health
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Danaher and Guardant is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Danaher and Guardant Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardant Health and Danaher 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 Danaher 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 has no effect on the direction of Danaher i.e., Danaher and Guardant Health go up and down completely randomly.
Pair Corralation between Danaher and Guardant Health
Considering the 90-day investment horizon Danaher is expected to under-perform the Guardant Health. But the stock apears to be less risky and, when comparing its historical volatility, Danaher is 3.58 times less risky than Guardant Health. The stock trades about -0.39 of its potential returns per unit of risk. The Guardant Health is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 2,035 in Guardant Health on August 23, 2024 and sell it today you would earn a total of 1,033 from holding Guardant Health or generate 50.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Danaher vs. Guardant Health
Performance |
| Timeline |
| Danaher |
| Guardant Health |
Danaher and Guardant Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danaher and Guardant Health
The main advantage of trading using opposite Danaher and Guardant Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danaher 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.| Danaher vs. Agilent Technologies | Danaher vs. Illumina | Danaher vs. IDEXX Laboratories | Danaher vs. Waters |
| Guardant Health vs. Neogen | Guardant Health vs. Myriad Genetics | Guardant Health vs. Fonar | Guardant Health vs. Burning Rock Biotech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |