Correlation Between Guardian Canadian and Guardian
Can any of the company-specific risk be diversified away by investing in both Guardian Canadian and Guardian 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 Canadian and Guardian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian Canadian Bond and Guardian i3 Global, you can compare the effects of market volatilities on Guardian Canadian and Guardian 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 Canadian with a short position of Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Canadian and Guardian.
Diversification Opportunities for Guardian Canadian and Guardian
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guardian and Guardian is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Canadian Bond and Guardian i3 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian i3 Global and Guardian Canadian 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 Canadian Bond are associated (or correlated) with Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian i3 Global has no effect on the direction of Guardian Canadian i.e., Guardian Canadian and Guardian go up and down completely randomly.
Pair Corralation between Guardian Canadian and Guardian
Assuming the 90 days trading horizon Guardian Canadian is expected to generate 2.74 times less return on investment than Guardian. But when comparing it to its historical volatility, Guardian Canadian Bond is 1.86 times less risky than Guardian. It trades about 0.16 of its potential returns per unit of risk. Guardian i3 Global is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 2,856 in Guardian i3 Global on September 1, 2024 and sell it today you would earn a total of 129.00 from holding Guardian i3 Global or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian Canadian Bond vs. Guardian i3 Global
Performance |
| Timeline |
| Guardian Canadian Bond |
| Guardian i3 Global |
Guardian Canadian and Guardian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Canadian and Guardian
The main advantage of trading using opposite Guardian Canadian and Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Canadian position performs unexpectedly, Guardian 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 will offset losses from the drop in Guardian's long position.| Guardian Canadian vs. BetaPro Gold Bullion | Guardian Canadian vs. BetaPro SP TSX | Guardian Canadian vs. BetaPro SPTSX Capped | Guardian Canadian vs. Global X Active |
| Guardian vs. Guardian i3 Quality | Guardian vs. Guardian Directed Premium | Guardian vs. Guardian Directed Equity | Guardian vs. CI ONE Global |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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