Correlation Between Global Dividend and Guardian International

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

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

Diversification Opportunities for Global Dividend and Guardian International

-0.61

Correlation Coefficient

Global Dividend  Guardian International

Excellent diversification

The 3 months correlation between Global and Guardian is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Global Dividend Growth and Guardian International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian International and Global Dividend 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 Global Dividend Growth are associated (or correlated) with Guardian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian International has no effect on the direction of Global Dividend i.e., Global Dividend and Guardian International go up and down completely randomly.

Pair Corralation between Global Dividend and Guardian International

Assuming the 90 days trading horizon Global Dividend Growth is expected to generate 1.27 times more return on investment than Guardian International. However, Global Dividend is 1.27 times more volatile than Guardian International Equity. It trades about 0.25 of its potential returns per unit of risk. Guardian International Equity is currently generating about -0.05 per unit of risk. If you would invest  1,032  in Global Dividend Growth on September 13, 2024 and sell it today you would earn a total of  166.00  from holding Global Dividend Growth or generate 16.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Global Dividend Growth  vs.  Guardian International Equity

Global Dividend Growth

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global Dividend Growth are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Global Dividend displayed solid returns over the last few months and may actually be approaching a breakup point.

Guardian International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Global Dividend and Guardian International

The main advantage of trading using opposite Global Dividend and Guardian International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Dividend position performs unexpectedly, Guardian International 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 International will offset losses from the drop in Guardian International's long position.

The idea behind Global Dividend Growth and Guardian International Equity 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.