Correlation Between Guardant Health and Doximity

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

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

Diversification Opportunities for Guardant Health and Doximity

0.6

Correlation Coefficient

Guardant Health  Doximity

Poor diversification

The 3 months correlation between Guardant and Doximity is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Doximity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doximity 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 Doximity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doximity has no effect on the direction of Guardant Health i.e., Guardant Health and Doximity go up and down completely randomly.

Pair Corralation between Guardant Health and Doximity

Allowing for the 90-day total investment horizon Guardant Health is expected to under-perform the Doximity. In addition to that, Guardant Health is 1.08 times more volatile than Doximity. It trades about -0.06 of its total potential returns per unit of risk. Doximity is currently generating about 0.03 per unit of volatility. If you would invest  5,807  in Doximity on May 1, 2025 and sell it today you would earn a total of  163.00  from holding Doximity or generate 2.81% return on investment over 90 days.

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

Guardant Health  vs.  Doximity

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 latest uncertain performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Doximity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Doximity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Doximity is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Guardant Health and Doximity

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

The idea behind Guardant Health and Doximity 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.