Correlation Between Alpha Teknova and Guardion Health

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

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

Diversification Opportunities for Alpha Teknova and Guardion Health

0.51

Correlation Coefficient

Alpha Teknova  Guardion Health

Very weak diversification

The 3 months correlation between Alpha and Guardion is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Teknova and Guardion Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardion Health Sciences and Alpha Teknova 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 Alpha Teknova are associated (or correlated) with Guardion Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardion Health Sciences has no effect on the direction of Alpha Teknova i.e., Alpha Teknova and Guardion Health go up and down completely randomly.

Pair Corralation between Alpha Teknova and Guardion Health

Given the investment horizon of 90 days Alpha Teknova is expected to generate 0.65 times more return on investment than Guardion Health. However, Alpha Teknova is 1.54 times less risky than Guardion Health. It trades about 0.17 of its potential returns per unit of risk. Guardion Health Sciences is currently generating about -0.03 per unit of risk. If you would invest  458.00  in Alpha Teknova on September 5, 2024 and sell it today you would earn a total of  352.00  from holding Alpha Teknova or generate 76.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	52.38%
Values	Daily Returns

Alpha Teknova  vs.  Guardion Health Sciences

Alpha Teknova

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Teknova are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Alpha Teknova displayed solid returns over the last few months and may actually be approaching a breakup point.

Guardion Health Sciences

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardion Health Sciences has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Alpha Teknova and Guardion Health

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

The idea behind Alpha Teknova and Guardion Health Sciences 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.