Correlation Between Guardant Health and Bluejay Diagnostics

Can any of the company-specific risk be diversified away by investing in both Guardant Health and Bluejay Diagnostics 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 Bluejay Diagnostics into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guardant Health and Bluejay Diagnostics, you can compare the effects of market volatilities on Guardant Health and Bluejay Diagnostics 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 Bluejay Diagnostics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Bluejay Diagnostics.

Diversification Opportunities for Guardant Health and Bluejay Diagnostics

-0.41

Correlation Coefficient

Guardant Health  Bluejay Diagnostics

Very good diversification

The 3 months correlation between Guardant and Bluejay is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Bluejay Diagnostics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bluejay Diagnostics 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 Bluejay Diagnostics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bluejay Diagnostics has no effect on the direction of Guardant Health i.e., Guardant Health and Bluejay Diagnostics go up and down completely randomly.

Pair Corralation between Guardant Health and Bluejay Diagnostics

Allowing for the 90-day total investment horizon Guardant Health is expected to generate 0.34 times more return on investment than Bluejay Diagnostics. However, Guardant Health is 2.96 times less risky than Bluejay Diagnostics. It trades about 0.02 of its potential returns per unit of risk. Bluejay Diagnostics is currently generating about -0.08 per unit of risk. If you would invest  3,723  in Guardant Health on October 12, 2024 and sell it today you would lose (64.00) from holding Guardant Health or give up 1.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Guardant Health  vs.  Bluejay Diagnostics

Guardant Health

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guardant Health are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Guardant Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Bluejay Diagnostics

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bluejay Diagnostics are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, Bluejay Diagnostics showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardant Health and Bluejay Diagnostics

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

The idea behind Guardant Health and Bluejay Diagnostics 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.