Correlation Between Guardant Health and Amarin PLC

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Guardant Health and Amarin PLC 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 Amarin PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and Amarin PLC, you can compare the effects of market volatilities on Guardant Health and Amarin PLC 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 Amarin PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Amarin PLC.

Diversification Opportunities for Guardant Health and Amarin PLC

-0.65
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Guardant and Amarin is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Amarin PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarin PLC 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 are associated (or correlated) with Amarin PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarin PLC has no effect on the direction of Guardant Health i.e., Guardant Health and Amarin PLC go up and down completely randomly.

Pair Corralation between Guardant Health and Amarin PLC

Allowing for the 90-day total investment horizon Guardant Health is expected to generate 1.07 times more return on investment than Amarin PLC. However, Guardant Health is 1.07 times more volatile than Amarin PLC. It trades about 0.57 of its potential returns per unit of risk. Amarin PLC is currently generating about -0.18 per unit of risk. If you would invest  2,188  in Guardant Health on September 1, 2024 and sell it today you would earn a total of  1,373  from holding Guardant Health or generate 62.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Guardant Health  vs.  Amarin PLC

 Performance 
       Timeline  
Guardant Health 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Guardant Health are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Guardant Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Amarin PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Amarin PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Guardant Health and Amarin PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guardant Health and Amarin PLC

The main advantage of trading using opposite Guardant Health and Amarin PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, Amarin PLC 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 Amarin PLC will offset losses from the drop in Amarin PLC's long position.
The idea behind Guardant Health and Amarin PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Money Managers
Screen money managers from public funds and ETFs managed around the world
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency