Correlation Between GUARDANT HEALTH and Jacquet Metal

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

By analyzing existing cross correlation between GUARDANT HEALTH CL and Jacquet Metal Service, you can compare the effects of market volatilities on GUARDANT HEALTH and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUARDANT HEALTH and Jacquet Metal.

Diversification Opportunities for GUARDANT HEALTH and Jacquet Metal

-0.03

Correlation Coefficient

GUARDANT HEALTH  Jacquet Metal

Good diversification

The 3 months correlation between GUARDANT and Jacquet is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding GUARDANT HEALTH CL and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 CL are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of GUARDANT HEALTH i.e., GUARDANT HEALTH and Jacquet Metal go up and down completely randomly.

Pair Corralation between GUARDANT HEALTH and Jacquet Metal

Assuming the 90 days horizon GUARDANT HEALTH CL is expected to generate 2.73 times more return on investment than Jacquet Metal. However, GUARDANT HEALTH is 2.73 times more volatile than Jacquet Metal Service. It trades about 0.16 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.18 per unit of risk. If you would invest  2,289  in GUARDANT HEALTH CL on September 15, 2024 and sell it today you would earn a total of  1,052  from holding GUARDANT HEALTH CL or generate 45.96% return on investment over 90 days.

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

GUARDANT HEALTH CL  vs.  Jacquet Metal Service

GUARDANT HEALTH CL

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GUARDANT HEALTH CL are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GUARDANT HEALTH reported solid returns over the last few months and may actually be approaching a breakup point.

Jacquet Metal Service

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jacquet Metal Service are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jacquet Metal reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GUARDANT HEALTH and Jacquet Metal

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

The idea behind GUARDANT HEALTH CL and Jacquet Metal Service 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.