Correlation Between Guardian and Guardian Ultra
Can any of the company-specific risk be diversified away by investing in both Guardian and Guardian Ultra 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 Ultra 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 Ultra Short Canadian, you can compare the effects of market volatilities on Guardian and Guardian Ultra 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 Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian and Guardian Ultra.
Diversification Opportunities for Guardian and Guardian Ultra
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guardian and Guardian is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guardian i3 Global and Guardian Ultra Short Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Ultra Short 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 Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Ultra Short has no effect on the direction of Guardian i.e., Guardian and Guardian Ultra go up and down completely randomly.
Pair Corralation between Guardian and Guardian Ultra
Assuming the 90 days trading horizon Guardian i3 Global is expected to generate 16.49 times more return on investment than Guardian Ultra. However, Guardian is 16.49 times more volatile than Guardian Ultra Short Canadian. It trades about 0.1 of its potential returns per unit of risk. Guardian Ultra Short Canadian is currently generating about 0.31 per unit of risk. If you would invest 1,851 in Guardian i3 Global on September 3, 2024 and sell it today you would earn a total of 1,134 from holding Guardian i3 Global or generate 61.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 71.11% |
| Values | Daily Returns |
Guardian i3 Global vs. Guardian Ultra Short Canadian
Performance |
| Timeline |
| Guardian i3 Global |
| Guardian Ultra Short |
Guardian and Guardian Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardian and Guardian Ultra
The main advantage of trading using opposite Guardian and Guardian Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian position performs unexpectedly, Guardian Ultra 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 Ultra will offset losses from the drop in Guardian Ultra's long position.| Guardian vs. Evolve Global Materials | Guardian vs. Evolve Global Healthcare | Guardian vs. Evolve Banks Enhanced | Guardian vs. Evolve Innovation Index |
| Guardian Ultra vs. Guardian Directed Equity | Guardian Ultra vs. Guardian Canadian Focused | Guardian Ultra vs. Guardian Canadian Sector | Guardian Ultra 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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