Correlation Between Guardant Health and Amer Renal

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Can any of the company-specific risk be diversified away by investing in both Guardant Health and Amer Renal 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 Amer Renal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and Amer Renal Assoc, you can compare the effects of market volatilities on Guardant Health and Amer Renal 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 Amer Renal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Amer Renal.

Diversification Opportunities for Guardant Health and Amer Renal

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Guardant and Amer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Amer Renal Assoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Renal Assoc 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 Amer Renal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Renal Assoc has no effect on the direction of Guardant Health i.e., Guardant Health and Amer Renal go up and down completely randomly.

Pair Corralation between Guardant Health and Amer Renal

If you would invest (100.00) in Amer Renal Assoc on December 30, 2023 and sell it today you would earn a total of  100.00  from holding Amer Renal Assoc or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Guardant Health  vs.  Amer Renal Assoc

 Performance 
       Timeline  
Guardant Health 

Risk-Adjusted Performance

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Over the last 90 days Guardant Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in April 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.
Amer Renal Assoc 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Amer Renal Assoc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Amer Renal is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guardant Health and Amer Renal Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guardant Health and Amer Renal

The main advantage of trading using opposite Guardant Health and Amer Renal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, Amer Renal 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 Amer Renal will offset losses from the drop in Amer Renal's long position.
The idea behind Guardant Health and Amer Renal Assoc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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