Correlation Between Figs and Guardant Health

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

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

Diversification Opportunities for Figs and Guardant Health

-0.3

Correlation Coefficient

Figs  Guardant Health

Very good diversification

The 3 months correlation between Figs and Guardant is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Figs Inc and Guardant Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardant Health and Figs 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 Figs Inc 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 Figs i.e., Figs and Guardant Health go up and down completely randomly.

Pair Corralation between Figs and Guardant Health

Given the investment horizon of 90 days Figs Inc is expected to under-perform the Guardant Health. But the stock apears to be less risky and, when comparing its historical volatility, Figs Inc is 1.26 times less risky than Guardant Health. The stock trades about -0.14 of its potential returns per unit of risk. The Guardant Health is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,588  in Guardant Health on January 5, 2025 and sell it today you would earn a total of  614.00  from holding Guardant Health or generate 17.11% return on investment over 90 days.

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

Figs Inc  vs.  Guardant Health

Figs Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Figs Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 Figs and Guardant Health

The main advantage of trading using opposite Figs and Guardant Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figs 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 Figs Inc 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.