Correlation Between Guardian Fundamental and Ancora Microcap
Can any of the company-specific risk be diversified away by investing in both Guardian Fundamental and Ancora Microcap 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 Fundamental and Ancora Microcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian Fundamental Global and Ancora Microcap Fund, you can compare the effects of market volatilities on Guardian Fundamental and Ancora Microcap 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 Fundamental with a short position of Ancora Microcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Fundamental and Ancora Microcap.
Diversification Opportunities for Guardian Fundamental and Ancora Microcap
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guardian and Ancora is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Fundamental Global and Ancora Microcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ancora Microcap and Guardian Fundamental 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 Fundamental Global are associated (or correlated) with Ancora Microcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ancora Microcap has no effect on the direction of Guardian Fundamental i.e., Guardian Fundamental and Ancora Microcap go up and down completely randomly.
Pair Corralation between Guardian Fundamental and Ancora Microcap
Assuming the 90 days horizon Guardian Fundamental is expected to generate 1.1 times less return on investment than Ancora Microcap. But when comparing it to its historical volatility, Guardian Fundamental Global is 1.5 times less risky than Ancora Microcap. It trades about 0.07 of its potential returns per unit of risk. Ancora Microcap Fund is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,389 in Ancora Microcap Fund on September 1, 2024 and sell it today you would earn a total of 398.00 from holding Ancora Microcap Fund or generate 28.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardian Fundamental Global vs. Ancora Microcap Fund
Performance |
| Timeline |
| Guardian Fundamental |
| Ancora Microcap |
Guardian Fundamental and Ancora Microcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian Fundamental and Ancora Microcap
The main advantage of trading using opposite Guardian Fundamental and Ancora Microcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian Fundamental position performs unexpectedly, Ancora Microcap 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 Ancora Microcap will offset losses from the drop in Ancora Microcap's long position.| Guardian Fundamental vs. Guardian Dividend Growth | Guardian Fundamental vs. Equity Growth Fund | Guardian Fundamental vs. Putnam High Income | Guardian Fundamental vs. Fidelity Advisor Technology |
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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