Correlation Between K Bro and Guardian Capital
Can any of the company-specific risk be diversified away by investing in both K Bro and Guardian Capital 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 K Bro and Guardian Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between K Bro Linen and Guardian Capital Group, you can compare the effects of market volatilities on K Bro and Guardian Capital 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 K Bro with a short position of Guardian Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of K Bro and Guardian Capital.
Diversification Opportunities for K Bro and Guardian Capital
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between KBL and Guardian is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding K Bro Linen and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital and K Bro 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 K Bro Linen are associated (or correlated) with Guardian Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Capital has no effect on the direction of K Bro i.e., K Bro and Guardian Capital go up and down completely randomly.
Pair Corralation between K Bro and Guardian Capital
Assuming the 90 days trading horizon K Bro Linen is expected to generate 1.43 times more return on investment than Guardian Capital. However, K Bro is 1.43 times more volatile than Guardian Capital Group. It trades about 0.03 of its potential returns per unit of risk. Guardian Capital Group is currently generating about -0.06 per unit of risk. If you would invest 3,615 in K Bro Linen on September 4, 2024 and sell it today you would earn a total of 260.00 from holding K Bro Linen or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
K Bro Linen vs. Guardian Capital Group
Performance |
| Timeline |
| K Bro Linen |
| Guardian Capital |
K Bro and Guardian Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with K Bro and Guardian Capital
The main advantage of trading using opposite K Bro and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if K Bro position performs unexpectedly, Guardian Capital 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 Capital will offset losses from the drop in Guardian Capital's long position.| K Bro vs. Richards Packaging Income | K Bro vs. Ag Growth International | K Bro vs. Information Services | K Bro vs. Pollard Banknote Limited |
| Guardian Capital vs. Guardian Capital Group | Guardian Capital vs. Clairvest Group | Guardian Capital vs. E L Financial Corp | Guardian Capital vs. Accord Financial Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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