Correlation Between Guardian Pharmacy and Clearday

Can any of the company-specific risk be diversified away by investing in both Guardian Pharmacy and Clearday 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 Clearday 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 Clearday, you can compare the effects of market volatilities on Guardian Pharmacy and Clearday 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 Clearday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Pharmacy and Clearday.

Diversification Opportunities for Guardian Pharmacy and Clearday

0.63

Correlation Coefficient

Guardian Pharmacy  Clearday

Poor diversification

The 3 months correlation between Guardian and Clearday is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Pharmacy Services, and Clearday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearday 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 Clearday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearday has no effect on the direction of Guardian Pharmacy i.e., Guardian Pharmacy and Clearday go up and down completely randomly.

Pair Corralation between Guardian Pharmacy and Clearday

If you would invest  1,680  in Guardian Pharmacy Services, on September 29, 2024 and sell it today you would earn a total of  441.00  from holding Guardian Pharmacy Services, or generate 26.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Guardian Pharmacy Services,  vs.  Clearday

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.

Clearday

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearday has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Clearday is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Guardian Pharmacy and Clearday

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

The idea behind Guardian Pharmacy Services, and Clearday 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.