Correlation Between Guardant Health and Integra LifeSciences
Can any of the company-specific risk be diversified away by investing in both Guardant Health and Integra LifeSciences 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 Integra LifeSciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and Integra LifeSciences Holdings, you can compare the effects of market volatilities on Guardant Health and Integra LifeSciences 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 Integra LifeSciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Integra LifeSciences.
Diversification Opportunities for Guardant Health and Integra LifeSciences
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guardant and Integra is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Integra LifeSciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integra LifeSciences 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 Integra LifeSciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integra LifeSciences has no effect on the direction of Guardant Health i.e., Guardant Health and Integra LifeSciences go up and down completely randomly.
Pair Corralation between Guardant Health and Integra LifeSciences
Allowing for the 90-day total investment horizon Guardant Health is expected to generate 0.94 times more return on investment than Integra LifeSciences. However, Guardant Health is 1.07 times less risky than Integra LifeSciences. It trades about 0.17 of its potential returns per unit of risk. Integra LifeSciences Holdings is currently generating about 0.11 per unit of risk. If you would invest 2,230 in Guardant Health on September 25, 2024 and sell it today you would earn a total of 937.00 from holding Guardant Health or generate 42.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Guardant Health vs. Integra LifeSciences Holdings
Performance |
Timeline |
Guardant Health |
Integra LifeSciences |
Guardant Health and Integra LifeSciences Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guardant Health and Integra LifeSciences
The main advantage of trading using opposite Guardant Health and Integra LifeSciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, Integra LifeSciences 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 Integra LifeSciences will offset losses from the drop in Integra LifeSciences' long position.Guardant Health vs. Definitive Healthcare Corp | Guardant Health vs. Edwards Lifesciences Corp | Guardant Health vs. Outset Medical | Guardant Health vs. Doximity |
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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.
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