Correlation Between Universe Pharmaceuticals and Guardion Health

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

By analyzing existing cross correlation between Universe Pharmaceuticals and Guardion Health Sciences, you can compare the effects of market volatilities on Universe Pharmaceuticals and Guardion Health 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 Universe Pharmaceuticals with a short position of Guardion Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universe Pharmaceuticals and Guardion Health.

Diversification Opportunities for Universe Pharmaceuticals and Guardion Health

-0.36

Correlation Coefficient

Universe Pharmaceuticals  Guardion Health

Very good diversification

The 3 months correlation between Universe and Guardion is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Universe Pharmaceuticals and Guardion Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardion Health Sciences and Universe Pharmaceuticals 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 Universe Pharmaceuticals are associated (or correlated) with Guardion Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardion Health Sciences has no effect on the direction of Universe Pharmaceuticals i.e., Universe Pharmaceuticals and Guardion Health go up and down completely randomly.

Pair Corralation between Universe Pharmaceuticals and Guardion Health

If you would invest  329.00  in Guardion Health Sciences on October 8, 2024 and sell it today you would earn a total of  0.00  from holding Guardion Health Sciences or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Universe Pharmaceuticals  vs.  Guardion Health Sciences

Universe Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Universe Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather conflicting basic indicators, Universe Pharmaceuticals may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Guardion Health Sciences

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Guardion Health Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly inconsistent basic indicators, Guardion Health may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Universe Pharmaceuticals and Guardion Health

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

The idea behind Universe Pharmaceuticals and Guardion Health Sciences 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.