Correlation Between Guardian Ultra and Guardian Directed
Can any of the company-specific risk be diversified away by investing in both Guardian Ultra and Guardian Directed 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 Ultra and Guardian Directed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian Ultra Short Canadian and Guardian Directed Premium, you can compare the effects of market volatilities on Guardian Ultra and Guardian Directed 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 Ultra with a short position of Guardian Directed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Ultra and Guardian Directed.
Diversification Opportunities for Guardian Ultra and Guardian Directed
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Guardian and Guardian is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Ultra Short Canadian and Guardian Directed Premium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Directed Premium and Guardian Ultra 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 Ultra Short Canadian are associated (or correlated) with Guardian Directed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Directed Premium has no effect on the direction of Guardian Ultra i.e., Guardian Ultra and Guardian Directed go up and down completely randomly.
Pair Corralation between Guardian Ultra and Guardian Directed
Assuming the 90 days trading horizon Guardian Ultra is expected to generate 16.06 times less return on investment than Guardian Directed. But when comparing it to its historical volatility, Guardian Ultra Short Canadian is 39.87 times less risky than Guardian Directed. It trades about 0.95 of its potential returns per unit of risk. Guardian Directed Premium is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 2,090 in Guardian Directed Premium on September 2, 2024 and sell it today you would earn a total of 102.00 from holding Guardian Directed Premium or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian Ultra Short Canadian vs. Guardian Directed Premium
Performance |
| Timeline |
| Guardian Ultra Short |
| Guardian Directed Premium |
Guardian Ultra and Guardian Directed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Ultra and Guardian Directed
The main advantage of trading using opposite Guardian Ultra and Guardian Directed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Ultra position performs unexpectedly, Guardian Directed 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 Directed will offset losses from the drop in Guardian Directed's long position.| Guardian Ultra vs. BetaPro SP 500 | Guardian Ultra vs. BetaPro SPTSX Capped | Guardian Ultra vs. BetaPro SPTSX 60 | Guardian Ultra vs. BetaPro NASDAQ 100 2x |
| Guardian Directed vs. Guardian Directed Equity | Guardian Directed vs. Guardian Canadian Focused | Guardian Directed vs. Guardian Canadian Sector | Guardian Directed vs. Guardian Ultra Short Canadian |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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