Correlation Between Guardian Capital and Freedom Bank
Can any of the company-specific risk be diversified away by investing in both Guardian Capital and Freedom Bank 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 Guardian Capital and Freedom Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian Capital Group and Freedom Bank of, you can compare the effects of market volatilities on Guardian Capital and Freedom Bank 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 Guardian Capital with a short position of Freedom Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Capital and Freedom Bank.
Diversification Opportunities for Guardian Capital and Freedom Bank
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guardian and Freedom is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and Freedom Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freedom Bank and Guardian Capital 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 Guardian Capital Group are associated (or correlated) with Freedom Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freedom Bank has no effect on the direction of Guardian Capital i.e., Guardian Capital and Freedom Bank go up and down completely randomly.
Pair Corralation between Guardian Capital and Freedom Bank
Assuming the 90 days horizon Guardian Capital Group is expected to generate 2.59 times more return on investment than Freedom Bank. However, Guardian Capital is 2.59 times more volatile than Freedom Bank of. It trades about 0.02 of its potential returns per unit of risk. Freedom Bank of is currently generating about 0.05 per unit of risk. If you would invest 2,777 in Guardian Capital Group on September 14, 2024 and sell it today you would earn a total of 158.00 from holding Guardian Capital Group or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 80.09% |
| Values | Daily Returns |
Guardian Capital Group vs. Freedom Bank of
Performance |
| Timeline |
| Guardian Capital |
| Freedom Bank |
Guardian Capital and Freedom Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Capital and Freedom Bank
The main advantage of trading using opposite Guardian Capital and Freedom Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Capital position performs unexpectedly, Freedom Bank 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 Freedom Bank will offset losses from the drop in Freedom Bank's long position.| Guardian Capital vs. Freedom Bank of | Guardian Capital vs. HUMANA INC | Guardian Capital vs. Barloworld Ltd ADR | Guardian Capital vs. Morningstar Unconstrained Allocation |
| Freedom Bank vs. National Capital Bank | Freedom Bank vs. Community Heritage Financial | Freedom Bank vs. Citizens Financial Corp | Freedom Bank vs. Bank of Idaho |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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