Correlation Between Clairvest and Guardian Capital

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

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

Diversification Opportunities for Clairvest and Guardian Capital

0.34

Correlation Coefficient

Clairvest  Guardian Capital

Weak diversification

The 3 months correlation between Clairvest and Guardian is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Clairvest Group and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital and Clairvest 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 Clairvest Group 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 Clairvest i.e., Clairvest and Guardian Capital go up and down completely randomly.

Pair Corralation between Clairvest and Guardian Capital

Assuming the 90 days trading horizon Clairvest Group is expected to under-perform the Guardian Capital. But the stock apears to be less risky and, when comparing its historical volatility, Clairvest Group is 1.32 times less risky than Guardian Capital. The stock trades about -0.03 of its potential returns per unit of risk. The Guardian Capital Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  4,062  in Guardian Capital Group on September 20, 2024 and sell it today you would lose (20.00) from holding Guardian Capital Group or give up 0.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Clairvest Group  vs.  Guardian Capital Group

Clairvest Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clairvest Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Clairvest is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

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. In spite of comparatively stable basic indicators, Guardian Capital is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Clairvest and Guardian Capital

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

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.