Correlation Between Modular Medical and Guardant Health

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

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

Diversification Opportunities for Modular Medical and Guardant Health

-0.51

Correlation Coefficient

Modular Medical  Guardant Health

Excellent diversification

The 3 months correlation between Modular and Guardant is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Modular Medical and Guardant Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardant Health and Modular Medical 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 Modular Medical 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 Modular Medical i.e., Modular Medical and Guardant Health go up and down completely randomly.

Pair Corralation between Modular Medical and Guardant Health

Given the investment horizon of 90 days Modular Medical is expected to under-perform the Guardant Health. In addition to that, Modular Medical is 1.67 times more volatile than Guardant Health. It trades about -0.08 of its total potential returns per unit of risk. Guardant Health is currently generating about 0.0 per unit of volatility. If you would invest  4,741  in Guardant Health on April 24, 2025 and sell it today you would lose (116.00) from holding Guardant Health or give up 2.45% of portfolio value over 90 days.

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

Modular Medical  vs.  Guardant Health

Modular Medical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Modular Medical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Guardant Health

Risk-Adjusted Performance

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 recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Modular Medical and Guardant Health

The main advantage of trading using opposite Modular Medical and Guardant Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Modular Medical 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 Modular Medical 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.