Correlation Between Guardant Health and Cencora
Can any of the company-specific risk be diversified away by investing in both Guardant Health and Cencora 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 Cencora into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and Cencora, you can compare the effects of market volatilities on Guardant Health and Cencora 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 Cencora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Cencora.
Diversification Opportunities for Guardant Health and Cencora
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guardant and Cencora is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Cencora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cencora 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 Cencora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cencora has no effect on the direction of Guardant Health i.e., Guardant Health and Cencora go up and down completely randomly.
Pair Corralation between Guardant Health and Cencora
Allowing for the 90-day total investment horizon Guardant Health is expected to generate 3.07 times more return on investment than Cencora. However, Guardant Health is 3.07 times more volatile than Cencora. It trades about 0.51 of its potential returns per unit of risk. Cencora is currently generating about 0.16 per unit of risk. If you would invest 2,220 in Guardant Health on August 28, 2024 and sell it today you would earn a total of 1,320 from holding Guardant Health or generate 59.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardant Health vs. Cencora
Performance |
| Timeline |
| Guardant Health |
| Cencora |
Guardant Health and Cencora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardant Health and Cencora
The main advantage of trading using opposite Guardant Health and Cencora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, Cencora 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 Cencora will offset losses from the drop in Cencora's long position.| Guardant Health vs. Illumina | Guardant Health vs. Twist Bioscience Corp | Guardant Health vs. Natera Inc | Guardant Health vs. Caredx Inc |
| Cencora vs. Vita Coco | Cencora vs. RadNet Inc | Cencora vs. Thai Beverage PCL | Cencora vs. Compania Cervecerias Unidas |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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