Correlation Between Guardant Health and Centogene

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

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

Diversification Opportunities for Guardant Health and Centogene

-0.53

Correlation Coefficient

Guardant Health  Centogene

Excellent diversification

The 3 months correlation between Guardant and Centogene is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Centogene B V in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centogene B V 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 Centogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centogene B V has no effect on the direction of Guardant Health i.e., Guardant Health and Centogene go up and down completely randomly.

Pair Corralation between Guardant Health and Centogene

Allowing for the 90-day total investment horizon Guardant Health is expected to generate 11.02 times less return on investment than Centogene. But when comparing it to its historical volatility, Guardant Health is 10.19 times less risky than Centogene. It trades about 0.13 of its potential returns per unit of risk. Centogene B V is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  6.50  in Centogene B V on September 13, 2024 and sell it today you would earn a total of  2.51  from holding Centogene B V or generate 38.62% return on investment over 90 days.

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

Guardant Health  vs.  Centogene B V

Guardant Health

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardant Health are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, Guardant Health demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Centogene B V

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Centogene B V are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Centogene reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardant Health and Centogene

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

The idea behind Guardant Health and Centogene B V 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.