Correlation Between Kemper and GUARDANT HEALTH
Can any of the company-specific risk be diversified away by investing in both Kemper 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 Kemper and GUARDANT HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kemper and GUARDANT HEALTH CL, you can compare the effects of market volatilities on Kemper 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 Kemper with a short position of GUARDANT HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kemper and GUARDANT HEALTH.
Diversification Opportunities for Kemper and GUARDANT HEALTH
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kemper and GUARDANT is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kemper 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 Kemper 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 Kemper 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 Kemper i.e., Kemper and GUARDANT HEALTH go up and down completely randomly.
Pair Corralation between Kemper and GUARDANT HEALTH
Assuming the 90 days horizon Kemper is expected to under-perform the GUARDANT HEALTH. But the stock apears to be less risky and, when comparing its historical volatility, Kemper is 2.56 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 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,973 in GUARDANT HEALTH CL on September 15, 2024 and sell it today you would earn a total of 368.00 from holding GUARDANT HEALTH CL or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kemper vs. GUARDANT HEALTH CL
Performance |
| Timeline |
| Kemper |
| GUARDANT HEALTH CL |
Kemper and GUARDANT HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kemper and GUARDANT HEALTH
The main advantage of trading using opposite Kemper and GUARDANT HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemper 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.| Kemper vs. GUARDANT HEALTH CL | Kemper vs. LEGACY IRON ORE | Kemper vs. CECO ENVIRONMENTAL | Kemper vs. EPSILON HEALTHCARE LTD |
| GUARDANT HEALTH vs. DexCom Inc | GUARDANT HEALTH vs. IDEXX Laboratories | GUARDANT HEALTH vs. Superior Plus Corp | GUARDANT HEALTH vs. NMI Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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