Correlation Between Alpine Banks and Guardian Capital

Can any of the company-specific risk be diversified away by investing in both Alpine Banks 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 Alpine Banks and Guardian Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alpine Banks of and Guardian Capital Group, you can compare the effects of market volatilities on Alpine Banks 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 Alpine Banks with a short position of Guardian Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpine Banks and Guardian Capital.

Diversification Opportunities for Alpine Banks and Guardian Capital

-0.19

Correlation Coefficient

Alpine Banks  Guardian Capital

Good diversification

The 3 months correlation between Alpine and Guardian is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Alpine Banks of and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital and Alpine Banks 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 Alpine Banks of 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 Alpine Banks i.e., Alpine Banks and Guardian Capital go up and down completely randomly.

Pair Corralation between Alpine Banks and Guardian Capital

Assuming the 90 days horizon Alpine Banks of is expected to generate 0.29 times more return on investment than Guardian Capital. However, Alpine Banks of is 3.51 times less risky than Guardian Capital. It trades about 0.42 of its potential returns per unit of risk. Guardian Capital Group is currently generating about -0.09 per unit of risk. If you would invest  3,300  in Alpine Banks of on September 29, 2024 and sell it today you would earn a total of  123.00  from holding Alpine Banks of or generate 3.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Alpine Banks of  vs.  Guardian Capital Group

Alpine Banks

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alpine Banks of are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady forward indicators, Alpine Banks sustained solid returns over the last few months and may actually be approaching a breakup point.

Guardian Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardian Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Alpine Banks and Guardian Capital

The main advantage of trading using opposite Alpine Banks and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alpine Banks 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.

The idea behind Alpine Banks of and Guardian Capital Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.