Correlation Between Guardant Health and DIH Holdings

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

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

Diversification Opportunities for Guardant Health and DIH Holdings

-0.41

Correlation Coefficient

Guardant Health  DIH Holdings

Very good diversification

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

Pair Corralation between Guardant Health and DIH Holdings

Allowing for the 90-day total investment horizon Guardant Health is expected to generate 2.3 times less return on investment than DIH Holdings. But when comparing it to its historical volatility, Guardant Health is 3.12 times less risky than DIH Holdings. It trades about 0.28 of its potential returns per unit of risk. DIH Holdings US, is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  100.00  in DIH Holdings US, on September 16, 2024 and sell it today you would earn a total of  40.00  from holding DIH Holdings US, or generate 40.0% return on investment over 90 days.

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

Guardant Health  vs.  DIH Holdings US,

Guardant Health

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardant Health are ranked lower than 11 (%) 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.

DIH Holdings US,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DIH Holdings US, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Guardant Health and DIH Holdings

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

The idea behind Guardant Health and DIH Holdings US, 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.