Correlation Between Guardian International and Guardian

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

By analyzing existing cross correlation between Guardian International Equity and Guardian i3 Global, you can compare the effects of market volatilities on Guardian International and Guardian 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 Guardian International with a short position of Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian International and Guardian.

Diversification Opportunities for Guardian International and Guardian

-0.51

Correlation Coefficient

Guardian International  Guardian

Excellent diversification

The 3 months correlation between Guardian and Guardian is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Guardian International Equity and Guardian i3 Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian i3 Global and Guardian International 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 Guardian International Equity are associated (or correlated) with Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian i3 Global has no effect on the direction of Guardian International i.e., Guardian International and Guardian go up and down completely randomly.

Pair Corralation between Guardian International and Guardian

Assuming the 90 days trading horizon Guardian International Equity is expected to under-perform the Guardian. But the etf apears to be less risky and, when comparing its historical volatility, Guardian International Equity is 1.13 times less risky than Guardian. The etf trades about -0.05 of its potential returns per unit of risk. The Guardian i3 Global is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,825  in Guardian i3 Global on September 13, 2024 and sell it today you would earn a total of  256.00  from holding Guardian i3 Global or generate 9.06% return on investment over 90 days.

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

Guardian International Equity  vs.  Guardian i3 Global

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.

Guardian i3 Global

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian i3 Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Guardian may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guardian International and Guardian

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

The idea behind Guardian International Equity and Guardian i3 Global 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.