Correlation Between Guardant Health and Simulations Plus
Can any of the company-specific risk be diversified away by investing in both Guardant Health and Simulations Plus 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 Simulations Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and Simulations Plus, you can compare the effects of market volatilities on Guardant Health and Simulations Plus 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 Simulations Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Simulations Plus.
Diversification Opportunities for Guardant Health and Simulations Plus
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guardant and Simulations is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Simulations Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simulations Plus 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 Simulations Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simulations Plus has no effect on the direction of Guardant Health i.e., Guardant Health and Simulations Plus go up and down completely randomly.
Pair Corralation between Guardant Health and Simulations Plus
Allowing for the 90-day total investment horizon Guardant Health is expected to generate 0.5 times more return on investment than Simulations Plus. However, Guardant Health is 2.0 times less risky than Simulations Plus. It trades about -0.02 of its potential returns per unit of risk. Simulations Plus is currently generating about -0.25 per unit of risk. If you would invest 4,830 in Guardant Health on April 25, 2025 and sell it today you would lose (281.00) from holding Guardant Health or give up 5.82% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Guardant Health vs. Simulations Plus
Performance |
Timeline |
Guardant Health |
Simulations Plus |
Guardant Health and Simulations Plus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guardant Health and Simulations Plus
The main advantage of trading using opposite Guardant Health and Simulations Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, Simulations Plus 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 Simulations Plus will offset losses from the drop in Simulations Plus' long position.Guardant Health vs. EXACT Sciences | Guardant Health vs. Natera Inc | Guardant Health vs. CareDx Inc | Guardant Health vs. Illumina |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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