Correlation Between Sera Prognostics and Guardant Health
Can any of the company-specific risk be diversified away by investing in both Sera Prognostics 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 Sera Prognostics and Guardant Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sera Prognostics and Guardant Health, you can compare the effects of market volatilities on Sera Prognostics 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 Sera Prognostics with a short position of Guardant Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sera Prognostics and Guardant Health.
Diversification Opportunities for Sera Prognostics and Guardant Health
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sera and Guardant is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sera Prognostics and Guardant Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardant Health and Sera Prognostics 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 Sera Prognostics 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 Sera Prognostics i.e., Sera Prognostics and Guardant Health go up and down completely randomly.
Pair Corralation between Sera Prognostics and Guardant Health
Given the investment horizon of 90 days Sera Prognostics is expected to under-perform the Guardant Health. But the stock apears to be less risky and, when comparing its historical volatility, Sera Prognostics is 1.14 times less risky than Guardant Health. The stock trades about -0.21 of its potential returns per unit of risk. The Guardant Health is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 3,177 in Guardant Health on November 3, 2024 and sell it today you would earn a total of 1,521 from holding Guardant Health or generate 47.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sera Prognostics vs. Guardant Health
Performance |
| Timeline |
| Sera Prognostics |
| Guardant Health |
Sera Prognostics and Guardant Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sera Prognostics and Guardant Health
The main advantage of trading using opposite Sera Prognostics and Guardant Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sera Prognostics 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.| Sera Prognostics vs. Fonar | Sera Prognostics vs. Burning Rock Biotech | Sera Prognostics vs. Exagen Inc | Sera Prognostics vs. Sotera Health Co |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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