Correlation Between Guardant Health and OraSure Technologies
Can any of the company-specific risk be diversified away by investing in both Guardant Health and OraSure Technologies 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 OraSure Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and OraSure Technologies, you can compare the effects of market volatilities on Guardant Health and OraSure Technologies 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 OraSure Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and OraSure Technologies.
Diversification Opportunities for Guardant Health and OraSure Technologies
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guardant and OraSure is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and OraSure Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OraSure Technologies 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 OraSure Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OraSure Technologies has no effect on the direction of Guardant Health i.e., Guardant Health and OraSure Technologies go up and down completely randomly.
Pair Corralation between Guardant Health and OraSure Technologies
Allowing for the 90-day total investment horizon Guardant Health is expected to generate 1.19 times more return on investment than OraSure Technologies. However, Guardant Health is 1.19 times more volatile than OraSure Technologies. It trades about 0.15 of its potential returns per unit of risk. OraSure Technologies is currently generating about 0.01 per unit of risk. If you would invest 3,054 in Guardant Health on December 28, 2024 and sell it today you would earn a total of 1,461 from holding Guardant Health or generate 47.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guardant Health vs. OraSure Technologies
Performance |
Timeline |
Guardant Health |
OraSure Technologies |
Guardant Health and OraSure Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guardant Health and OraSure Technologies
The main advantage of trading using opposite Guardant Health and OraSure Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, OraSure Technologies 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 OraSure Technologies will offset losses from the drop in OraSure Technologies' 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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