Correlation Between Guardian Capital and K Bro
Can any of the company-specific risk be diversified away by investing in both Guardian Capital and K Bro 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 K Bro 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 K Bro Linen, you can compare the effects of market volatilities on Guardian Capital and K Bro 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 K Bro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Capital and K Bro.
Diversification Opportunities for Guardian Capital and K Bro
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guardian and KBL is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and K Bro Linen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K Bro Linen 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 K Bro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K Bro Linen has no effect on the direction of Guardian Capital i.e., Guardian Capital and K Bro go up and down completely randomly.
Pair Corralation between Guardian Capital and K Bro
Assuming the 90 days trading horizon Guardian Capital is expected to generate 2.59 times less return on investment than K Bro. But when comparing it to its historical volatility, Guardian Capital Group is 1.23 times less risky than K Bro. It trades about 0.32 of its potential returns per unit of risk. K Bro Linen is currently generating about 0.68 of returns per unit of risk over similar time horizon. If you would invest 3,376 in K Bro Linen on September 4, 2024 and sell it today you would earn a total of 499.00 from holding K Bro Linen or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guardian Capital Group vs. K Bro Linen
Performance |
| Timeline |
| Guardian Capital |
| K Bro Linen |
Guardian Capital and K Bro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Capital and K Bro
The main advantage of trading using opposite Guardian Capital and K Bro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Capital position performs unexpectedly, K Bro 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 K Bro will offset losses from the drop in K Bro'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 |
| K Bro vs. Richards Packaging Income | K Bro vs. Ag Growth International | K Bro vs. Information Services | K Bro vs. Pollard Banknote Limited |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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