Correlation Between Guardant Health and NeoGenomics
Can any of the company-specific risk be diversified away by investing in both Guardant Health and NeoGenomics 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 NeoGenomics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and NeoGenomics, you can compare the effects of market volatilities on Guardant Health and NeoGenomics 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 NeoGenomics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and NeoGenomics.
Diversification Opportunities for Guardant Health and NeoGenomics
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guardant and NeoGenomics is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and NeoGenomics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NeoGenomics 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 NeoGenomics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NeoGenomics has no effect on the direction of Guardant Health i.e., Guardant Health and NeoGenomics go up and down completely randomly.
Pair Corralation between Guardant Health and NeoGenomics
Allowing for the 90-day total investment horizon Guardant Health is expected to generate 0.9 times more return on investment than NeoGenomics. However, Guardant Health is 1.11 times less risky than NeoGenomics. It trades about 0.13 of its potential returns per unit of risk. NeoGenomics is currently generating about -0.13 per unit of risk. If you would invest 3,054 in Guardant Health on December 29, 2024 and sell it today you would earn a total of 1,260 from holding Guardant Health or generate 41.26% 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. NeoGenomics
Performance |
Timeline |
Guardant Health |
NeoGenomics |
Guardant Health and NeoGenomics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guardant Health and NeoGenomics
The main advantage of trading using opposite Guardant Health and NeoGenomics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, NeoGenomics 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 NeoGenomics will offset losses from the drop in NeoGenomics' long position.Guardant Health vs. Illumina | Guardant Health vs. Twist Bioscience Corp | Guardant Health vs. Natera Inc | Guardant Health vs. Caredx Inc |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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