Correlation Between Guardant Health and GeneDx Holdings
Can any of the company-specific risk be diversified away by investing in both Guardant Health and GeneDx Holdings 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 GeneDx Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and GeneDx Holdings Corp, you can compare the effects of market volatilities on Guardant Health and GeneDx Holdings 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 GeneDx Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and GeneDx Holdings.
Diversification Opportunities for Guardant Health and GeneDx Holdings
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guardant and GeneDx is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and GeneDx Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GeneDx Holdings Corp 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 GeneDx Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GeneDx Holdings Corp has no effect on the direction of Guardant Health i.e., Guardant Health and GeneDx Holdings go up and down completely randomly.
Pair Corralation between Guardant Health and GeneDx Holdings
Allowing for the 90-day total investment horizon Guardant Health is expected to under-perform the GeneDx Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Guardant Health is 1.19 times less risky than GeneDx Holdings. The stock trades about -0.27 of its potential returns per unit of risk. The GeneDx Holdings Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 7,839 in GeneDx Holdings Corp on September 29, 2024 and sell it today you would lose (34.00) from holding GeneDx Holdings Corp or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardant Health vs. GeneDx Holdings Corp
Performance |
| Timeline |
| Guardant Health |
| GeneDx Holdings Corp |
Guardant Health and GeneDx Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardant Health and GeneDx Holdings
The main advantage of trading using opposite Guardant Health and GeneDx Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, GeneDx Holdings 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 GeneDx Holdings will offset losses from the drop in GeneDx Holdings' long position.| Guardant Health vs. Illumina | Guardant Health vs. Twist Bioscience Corp | Guardant Health vs. Natera Inc | Guardant Health vs. Caredx Inc |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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