Correlation Between Guardant Health and Axogen
Can any of the company-specific risk be diversified away by investing in both Guardant Health and Axogen 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 Axogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and Axogen Inc, you can compare the effects of market volatilities on Guardant Health and Axogen 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 Axogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Axogen.
Diversification Opportunities for Guardant Health and Axogen
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guardant and Axogen is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Axogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axogen Inc 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 Axogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axogen Inc has no effect on the direction of Guardant Health i.e., Guardant Health and Axogen go up and down completely randomly.
Pair Corralation between Guardant Health and Axogen
Allowing for the 90-day total investment horizon Guardant Health is expected to generate 4.38 times less return on investment than Axogen. But when comparing it to its historical volatility, Guardant Health is 1.04 times less risky than Axogen. It trades about 0.01 of its potential returns per unit of risk. Axogen Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,063 in Axogen Inc on September 2, 2024 and sell it today you would earn a total of 327.00 from holding Axogen Inc or generate 30.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardant Health vs. Axogen Inc
Performance |
| Timeline |
| Guardant Health |
| Axogen Inc |
Guardant Health and Axogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardant Health and Axogen
The main advantage of trading using opposite Guardant Health and Axogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, Axogen 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 Axogen will offset losses from the drop in Axogen's long position.| Guardant Health vs. Illumina | Guardant Health vs. Twist Bioscience Corp | Guardant Health vs. Natera Inc | Guardant Health vs. Caredx Inc |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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