Correlation Between Guardian Pharmacy and ATI Physical

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

By analyzing existing cross correlation between Guardian Pharmacy Services, and ATI Physical Therapy, you can compare the effects of market volatilities on Guardian Pharmacy and ATI Physical 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 Guardian Pharmacy with a short position of ATI Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Pharmacy and ATI Physical.

Diversification Opportunities for Guardian Pharmacy and ATI Physical

-0.75

Correlation Coefficient

Guardian Pharmacy  ATI Physical

Pay attention - limited upside

The 3 months correlation between Guardian and ATI is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Pharmacy Services, and ATI Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATI Physical Therapy and Guardian Pharmacy 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 Guardian Pharmacy Services, are associated (or correlated) with ATI Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATI Physical Therapy has no effect on the direction of Guardian Pharmacy i.e., Guardian Pharmacy and ATI Physical go up and down completely randomly.

Pair Corralation between Guardian Pharmacy and ATI Physical

Given the investment horizon of 90 days Guardian Pharmacy Services, is expected to generate 0.66 times more return on investment than ATI Physical. However, Guardian Pharmacy Services, is 1.52 times less risky than ATI Physical. It trades about 0.16 of its potential returns per unit of risk. ATI Physical Therapy is currently generating about -0.08 per unit of risk. If you would invest  1,600  in Guardian Pharmacy Services, on September 27, 2024 and sell it today you would earn a total of  659.00  from holding Guardian Pharmacy Services, or generate 41.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	13.49%
Values	Daily Returns

Guardian Pharmacy Services,  vs.  ATI Physical Therapy

Guardian Pharmacy

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Pharmacy Services, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Guardian Pharmacy displayed solid returns over the last few months and may actually be approaching a breakup point.

ATI Physical Therapy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATI Physical Therapy has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Guardian Pharmacy and ATI Physical

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

The idea behind Guardian Pharmacy Services, and ATI Physical Therapy 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.

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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.