Correlation Between Guardian and Guardian Canadian
Can any of the company-specific risk be diversified away by investing in both Guardian and Guardian Canadian 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 and Guardian Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardian i3 Global and Guardian Canadian Focused, you can compare the effects of market volatilities on Guardian and Guardian Canadian 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 with a short position of Guardian Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian and Guardian Canadian.
Diversification Opportunities for Guardian and Guardian Canadian
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guardian and Guardian is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Guardian i3 Global and Guardian Canadian Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Canadian Focused and Guardian 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 i3 Global are associated (or correlated) with Guardian Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Canadian Focused has no effect on the direction of Guardian i.e., Guardian and Guardian Canadian go up and down completely randomly.
Pair Corralation between Guardian and Guardian Canadian
Assuming the 90 days trading horizon Guardian is expected to generate 1.61 times less return on investment than Guardian Canadian. In addition to that, Guardian is 1.21 times more volatile than Guardian Canadian Focused. It trades about 0.11 of its total potential returns per unit of risk. Guardian Canadian Focused is currently generating about 0.21 per unit of volatility. If you would invest 2,000 in Guardian Canadian Focused on September 1, 2024 and sell it today you would earn a total of 1,015 from holding Guardian Canadian Focused or generate 50.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 49.19% |
| Values | Daily Returns |
Guardian i3 Global vs. Guardian Canadian Focused
Performance |
| Timeline |
| Guardian i3 Global |
| Guardian Canadian Focused |
Guardian and Guardian Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian and Guardian Canadian
The main advantage of trading using opposite Guardian and Guardian Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian position performs unexpectedly, Guardian Canadian 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 Canadian will offset losses from the drop in Guardian Canadian's long position.| Guardian vs. Guardian i3 Quality | Guardian vs. Guardian Directed Premium | Guardian vs. Guardian Directed Equity | Guardian vs. CI ONE Global |
| Guardian Canadian vs. Guardian Directed Equity | Guardian Canadian vs. Guardian Canadian Sector | Guardian Canadian vs. Guardian Ultra Short Canadian | Guardian Canadian vs. Guardian i3 Global |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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