Correlation Between Pacific Funds and Guardian Dividend
Can any of the company-specific risk be diversified away by investing in both Pacific Funds and Guardian Dividend 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 Pacific Funds and Guardian Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pacific Funds Small Cap and Guardian Dividend Growth, you can compare the effects of market volatilities on Pacific Funds and Guardian Dividend 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 Pacific Funds with a short position of Guardian Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pacific Funds and Guardian Dividend.
Diversification Opportunities for Pacific Funds and Guardian Dividend
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pacific and Guardian is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Pacific Funds Small Cap and Guardian Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Dividend Growth and Pacific Funds 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 Pacific Funds Small Cap are associated (or correlated) with Guardian Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Dividend Growth has no effect on the direction of Pacific Funds i.e., Pacific Funds and Guardian Dividend go up and down completely randomly.
Pair Corralation between Pacific Funds and Guardian Dividend
Assuming the 90 days horizon Pacific Funds Small Cap is expected to under-perform the Guardian Dividend. In addition to that, Pacific Funds is 1.67 times more volatile than Guardian Dividend Growth. It trades about -0.02 of its total potential returns per unit of risk. Guardian Dividend Growth is currently generating about 0.1 per unit of volatility. If you would invest 1,239 in Guardian Dividend Growth on September 3, 2024 and sell it today you would earn a total of 449.00 from holding Guardian Dividend Growth or generate 36.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.02% |
| Values | Daily Returns |
Pacific Funds Small Cap vs. Guardian Dividend Growth
Performance |
| Timeline |
| Pacific Funds Small |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Guardian Dividend Growth |
Pacific Funds and Guardian Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pacific Funds and Guardian Dividend
The main advantage of trading using opposite Pacific Funds and Guardian Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pacific Funds position performs unexpectedly, Guardian Dividend 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 Dividend will offset losses from the drop in Guardian Dividend's long position.| Pacific Funds vs. Virtus High Yield | Pacific Funds vs. Prudential High Yield | Pacific Funds vs. Gmo High Yield | Pacific Funds vs. Calvert High Yield |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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