Correlation Between Guardant Health and Concord Medical

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

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

Diversification Opportunities for Guardant Health and Concord Medical

-0.63

Correlation Coefficient

Guardant Health  Concord Medical

Excellent diversification

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

Pair Corralation between Guardant Health and Concord Medical

Allowing for the 90-day total investment horizon Guardant Health is expected to generate 0.62 times more return on investment than Concord Medical. However, Guardant Health is 1.61 times less risky than Concord Medical. It trades about -0.03 of its potential returns per unit of risk. Concord Medical Services is currently generating about -0.08 per unit of risk. If you would invest  4,405  in Guardant Health on May 3, 2025 and sell it today you would lose (307.00) from holding Guardant Health or give up 6.97% of portfolio value over 90 days.

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

Guardant Health  vs.  Concord Medical Services

Guardant Health

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guardant Health has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Guardant Health is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Concord Medical Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Concord Medical Services 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 fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Guardant Health and Concord Medical

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

The idea behind Guardant Health and Concord Medical Services 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.