Correlation Between Financial and Guardian International
Can any of the company-specific risk be diversified away by investing in both Financial and Guardian International 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 Financial and Guardian International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and Guardian International Equity, you can compare the effects of market volatilities on Financial and Guardian International 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 Financial with a short position of Guardian International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Guardian International.
Diversification Opportunities for Financial and Guardian International
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Financial and Guardian is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Guardian International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian International and Financial 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 Financial 15 Split are associated (or correlated) with Guardian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian International has no effect on the direction of Financial i.e., Financial and Guardian International go up and down completely randomly.
Pair Corralation between Financial and Guardian International
Assuming the 90 days trading horizon Financial 15 Split is expected to generate 2.7 times more return on investment than Guardian International. However, Financial is 2.7 times more volatile than Guardian International Equity. It trades about 0.06 of its potential returns per unit of risk. Guardian International Equity is currently generating about 0.05 per unit of risk. If you would invest 709.00 in Financial 15 Split on September 12, 2024 and sell it today you would earn a total of 274.00 from holding Financial 15 Split or generate 38.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.21% |
| Values | Daily Returns |
Financial 15 Split vs. Guardian International Equity
Performance |
| Timeline |
| Financial 15 Split |
| Guardian International |
Financial and Guardian International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and Guardian International
The main advantage of trading using opposite Financial and Guardian International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, Guardian International 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 Guardian International will offset losses from the drop in Guardian International's long position.| Financial vs. Dividend 15 Split | Financial vs. Dividend Growth Split | Financial vs. North American Financial | Financial vs. Life Banc Split |
| Guardian International vs. iShares Core MSCI | Guardian International vs. BMO MSCI EAFE | Guardian International vs. Vanguard FTSE Developed | Guardian International vs. iShares MSCI EAFE |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |