Correlation Between EUDA Health and Guardant Health

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

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

Diversification Opportunities for EUDA Health and Guardant Health

0.05

Correlation Coefficient

EUDA Health  Guardant Health

Significant diversification

The 3 months correlation between EUDA and Guardant is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding EUDA Health Holdings and Guardant Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardant Health and EUDA 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 EUDA Health Holdings are associated (or correlated) with Guardant Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardant Health has no effect on the direction of EUDA Health i.e., EUDA Health and Guardant Health go up and down completely randomly.

Pair Corralation between EUDA Health and Guardant Health

Given the investment horizon of 90 days EUDA Health is expected to generate 1.14 times less return on investment than Guardant Health. But when comparing it to its historical volatility, EUDA Health Holdings is 1.16 times less risky than Guardant Health. It trades about 0.04 of its potential returns per unit of risk. Guardant Health is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,289  in Guardant Health on January 13, 2025 and sell it today you would earn a total of  82.00  from holding Guardant Health or generate 1.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EUDA Health Holdings  vs.  Guardant Health

EUDA Health Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days EUDA Health Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, EUDA Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Guardant Health

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guardant Health are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Guardant Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EUDA Health and Guardant Health

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

The idea behind EUDA Health Holdings and Guardant Health 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.