Correlation Between Guardian Capital and Economic Investment
Can any of the company-specific risk be diversified away by investing in both Guardian Capital and Economic Investment 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 Economic Investment 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 Economic Investment Trust, you can compare the effects of market volatilities on Guardian Capital and Economic Investment 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 Economic Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Capital and Economic Investment.
Diversification Opportunities for Guardian Capital and Economic Investment
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guardian and Economic is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and Economic Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Economic Investment Trust 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 Economic Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Economic Investment Trust has no effect on the direction of Guardian Capital i.e., Guardian Capital and Economic Investment go up and down completely randomly.
Pair Corralation between Guardian Capital and Economic Investment
Assuming the 90 days trading horizon Guardian Capital is expected to generate 1.26 times less return on investment than Economic Investment. In addition to that, Guardian Capital is 1.36 times more volatile than Economic Investment Trust. It trades about 0.22 of its total potential returns per unit of risk. Economic Investment Trust is currently generating about 0.39 per unit of volatility. If you would invest 16,484 in Economic Investment Trust on October 25, 2024 and sell it today you would earn a total of 1,642 from holding Economic Investment Trust or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian Capital Group vs. Economic Investment Trust
Performance |
| Timeline |
| Guardian Capital |
| Economic Investment Trust |
Guardian Capital and Economic Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Capital and Economic Investment
The main advantage of trading using opposite Guardian Capital and Economic Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Capital position performs unexpectedly, Economic Investment 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 Economic Investment will offset losses from the drop in Economic Investment's long position.| Guardian Capital vs. Guardian Capital Group | Guardian Capital vs. Clairvest Group | Guardian Capital vs. E L Financial Corp | Guardian Capital vs. Accord Financial Corp |
| Economic Investment vs. Uniteds Limited | Economic Investment vs. E L Financial Corp | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group |
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.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| CEOs Directory Screen CEOs from public companies around the world |