Correlation Between Guardant Health and Inogen

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

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

Diversification Opportunities for Guardant Health and Inogen

0.16

Correlation Coefficient

Guardant Health  Inogen

Average diversification

The 3 months correlation between Guardant and Inogen is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Inogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inogen Inc 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 Inogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inogen Inc has no effect on the direction of Guardant Health i.e., Guardant Health and Inogen go up and down completely randomly.

Pair Corralation between Guardant Health and Inogen

Allowing for the 90-day total investment horizon Guardant Health is expected to generate 1.08 times more return on investment than Inogen. However, Guardant Health is 1.08 times more volatile than Inogen Inc. It trades about 0.16 of its potential returns per unit of risk. Inogen Inc is currently generating about 0.01 per unit of risk. If you would invest  2,180  in Guardant Health on October 3, 2024 and sell it today you would earn a total of  874.00  from holding Guardant Health or generate 40.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Guardant Health  vs.  Inogen Inc

Guardant Health

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardant Health are ranked lower than 12 (%) 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.

Inogen Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Inogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Inogen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Guardant Health and Inogen

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

The idea behind Guardant Health and Inogen Inc 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..