Correlation Between CI Gold and Guardian Directed
Can any of the company-specific risk be diversified away by investing in both CI Gold and Guardian Directed 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 CI Gold and Guardian Directed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Gold Bullion and Guardian Directed Equity, you can compare the effects of market volatilities on CI Gold and Guardian Directed 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 CI Gold with a short position of Guardian Directed. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Gold and Guardian Directed.
Diversification Opportunities for CI Gold and Guardian Directed
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VALT and Guardian is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CI Gold Bullion and Guardian Directed Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Directed Equity and CI Gold 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 CI Gold Bullion are associated (or correlated) with Guardian Directed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Directed Equity has no effect on the direction of CI Gold i.e., CI Gold and Guardian Directed go up and down completely randomly.
Pair Corralation between CI Gold and Guardian Directed
Assuming the 90 days trading horizon CI Gold Bullion is expected to generate 2.18 times more return on investment than Guardian Directed. However, CI Gold is 2.18 times more volatile than Guardian Directed Equity. It trades about 0.11 of its potential returns per unit of risk. Guardian Directed Equity is currently generating about 0.11 per unit of risk. If you would invest 2,905 in CI Gold Bullion on September 2, 2024 and sell it today you would earn a total of 422.00 from holding CI Gold Bullion or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CI Gold Bullion vs. Guardian Directed Equity
Performance |
| Timeline |
| CI Gold Bullion |
| Guardian Directed Equity |
CI Gold and Guardian Directed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Gold and Guardian Directed
The main advantage of trading using opposite CI Gold and Guardian Directed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Gold position performs unexpectedly, Guardian Directed 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 Directed will offset losses from the drop in Guardian Directed's long position.| CI Gold vs. NBI High Yield | CI Gold vs. NBI Unconstrained Fixed | CI Gold vs. Mackenzie Developed ex North | CI Gold vs. BMO Short Term Bond |
| Guardian Directed vs. Brompton Global Dividend | Guardian Directed vs. Brompton European Dividend | Guardian Directed vs. Brompton North American | Guardian Directed vs. Global Healthcare Income |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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