Correlation Between United Guardian and Beauty Health
Can any of the company-specific risk be diversified away by investing in both United Guardian and Beauty 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 United Guardian and Beauty Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Guardian and Beauty Health Co, you can compare the effects of market volatilities on United Guardian and Beauty 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 United Guardian with a short position of Beauty Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Guardian and Beauty Health.
Diversification Opportunities for United Guardian and Beauty Health
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and Beauty is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Beauty Health Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beauty Health and United Guardian 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 United Guardian are associated (or correlated) with Beauty Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beauty Health has no effect on the direction of United Guardian i.e., United Guardian and Beauty Health go up and down completely randomly.
Pair Corralation between United Guardian and Beauty Health
Allowing for the 90-day total investment horizon United Guardian is expected to generate 0.52 times more return on investment than Beauty Health. However, United Guardian is 1.91 times less risky than Beauty Health. It trades about 0.01 of its potential returns per unit of risk. Beauty Health Co is currently generating about -0.03 per unit of risk. If you would invest 1,050 in United Guardian on August 24, 2024 and sell it today you would lose (75.00) from holding United Guardian or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Guardian vs. Beauty Health Co
Performance |
| Timeline |
| United Guardian |
| Beauty Health |
United Guardian and Beauty Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Guardian and Beauty Health
The main advantage of trading using opposite United Guardian and Beauty Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian position performs unexpectedly, Beauty 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 Beauty Health will offset losses from the drop in Beauty Health's long position.| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
| Beauty Health vs. Clear Secure | Beauty Health vs. GXO Logistics | Beauty Health vs. Doximity | Beauty Health vs. Figs 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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