Correlation Between Tradegate and GUARDANT HEALTH
Can any of the company-specific risk be diversified away by investing in both Tradegate 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 Tradegate and GUARDANT HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and GUARDANT HEALTH CL, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of GUARDANT HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and GUARDANT HEALTH.
Diversification Opportunities for Tradegate and GUARDANT HEALTH
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Tradegate and GUARDANT is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and GUARDANT HEALTH CL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUARDANT HEALTH CL and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 CL has no effect on the direction of Tradegate i.e., Tradegate and GUARDANT HEALTH go up and down completely randomly.
Pair Corralation between Tradegate and GUARDANT HEALTH
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to under-perform the GUARDANT HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Tradegate AG Wertpapierhandelsbank is 2.55 times less risky than GUARDANT HEALTH. The stock trades about -0.07 of its potential returns per unit of risk. The GUARDANT HEALTH CL is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,768 in GUARDANT HEALTH CL on September 3, 2024 and sell it today you would earn a total of 1,550 from holding GUARDANT HEALTH CL or generate 87.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. GUARDANT HEALTH CL
Performance |
| Timeline |
| Tradegate AG Wertpap |
| GUARDANT HEALTH CL |
Tradegate and GUARDANT HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and GUARDANT HEALTH
The main advantage of trading using opposite Tradegate and GUARDANT HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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.| Tradegate vs. TRADEGATE | Tradegate vs. CARSALESCOM | Tradegate vs. China Resources Beer | Tradegate vs. MARKET VECTR RETAIL |
| GUARDANT HEALTH vs. Thermo Fisher Scientific | GUARDANT HEALTH vs. Danaher | GUARDANT HEALTH vs. Danaher | GUARDANT HEALTH vs. SIEMENS HEALTH ADR050 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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