Correlation Between ATI Physical and Guardian Pharmacy

Can any of the company-specific risk be diversified away by investing in both ATI Physical and Guardian Pharmacy 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 ATI Physical and Guardian Pharmacy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ATI Physical Therapy and Guardian Pharmacy Services,, you can compare the effects of market volatilities on ATI Physical and Guardian Pharmacy 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 ATI Physical with a short position of Guardian Pharmacy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATI Physical and Guardian Pharmacy.

Diversification Opportunities for ATI Physical and Guardian Pharmacy

-0.7

Correlation Coefficient

ATI Physical  Guardian Pharmacy

Excellent diversification

The 3 months correlation between ATI and Guardian is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding ATI Physical Therapy and Guardian Pharmacy Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Pharmacy and ATI Physical 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 ATI Physical Therapy are associated (or correlated) with Guardian Pharmacy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Pharmacy has no effect on the direction of ATI Physical i.e., ATI Physical and Guardian Pharmacy go up and down completely randomly.

Pair Corralation between ATI Physical and Guardian Pharmacy

Given the investment horizon of 90 days ATI Physical Therapy is expected to under-perform the Guardian Pharmacy. In addition to that, ATI Physical is 1.49 times more volatile than Guardian Pharmacy Services,. It trades about -0.08 of its total potential returns per unit of risk. Guardian Pharmacy Services, is currently generating about 0.13 per unit of volatility. If you would invest  1,600  in Guardian Pharmacy Services, on September 29, 2024 and sell it today you would earn a total of  521.00  from holding Guardian Pharmacy Services, or generate 32.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	13.51%
Values	Daily Returns

ATI Physical Therapy  vs.  Guardian Pharmacy Services,

ATI Physical Therapy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATI Physical Therapy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Guardian Pharmacy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Pharmacy Services, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Guardian Pharmacy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ATI Physical and Guardian Pharmacy

The main advantage of trading using opposite ATI Physical and Guardian Pharmacy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATI Physical position performs unexpectedly, Guardian Pharmacy 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 Guardian Pharmacy will offset losses from the drop in Guardian Pharmacy's long position.

The idea behind ATI Physical Therapy and Guardian Pharmacy Services, 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.