Correlation Between Guardian Directed and IA Clarington
Can any of the company-specific risk be diversified away by investing in both Guardian Directed and IA Clarington 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 Directed and IA Clarington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian Directed Premium and IA Clarington Strategic, you can compare the effects of market volatilities on Guardian Directed and IA Clarington 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 Directed with a short position of IA Clarington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Directed and IA Clarington.
Diversification Opportunities for Guardian Directed and IA Clarington
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guardian and ISIF is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Directed Premium and IA Clarington Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IA Clarington Strategic and Guardian Directed 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 Directed Premium are associated (or correlated) with IA Clarington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IA Clarington Strategic has no effect on the direction of Guardian Directed i.e., Guardian Directed and IA Clarington go up and down completely randomly.
Pair Corralation between Guardian Directed and IA Clarington
Assuming the 90 days trading horizon Guardian Directed Premium is expected to generate 1.35 times more return on investment than IA Clarington. However, Guardian Directed is 1.35 times more volatile than IA Clarington Strategic. It trades about 0.09 of its potential returns per unit of risk. IA Clarington Strategic is currently generating about 0.05 per unit of risk. If you would invest 2,098 in Guardian Directed Premium on October 30, 2024 and sell it today you would earn a total of 62.00 from holding Guardian Directed Premium or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian Directed Premium vs. IA Clarington Strategic
Performance |
| Timeline |
| Guardian Directed Premium |
| IA Clarington Strategic |
Guardian Directed and IA Clarington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Directed and IA Clarington
The main advantage of trading using opposite Guardian Directed and IA Clarington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Directed position performs unexpectedly, IA Clarington 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 IA Clarington will offset losses from the drop in IA Clarington's long position.| 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 |
| IA Clarington vs. iShares SPTSX 60 | IA Clarington vs. iShares Core SP | IA Clarington vs. iShares Core SPTSX | IA Clarington vs. BMO Aggregate Bond |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |