Correlation Between Azimut Holding and Guardian Capital

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

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

Diversification Opportunities for Azimut Holding and Guardian Capital

0.4

Correlation Coefficient

Azimut Holding  Guardian Capital

Very weak diversification

The 3 months correlation between Azimut and Guardian is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Azimut Holding SpA and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital and Azimut Holding 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 Azimut Holding SpA 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 Azimut Holding i.e., Azimut Holding and Guardian Capital go up and down completely randomly.

Pair Corralation between Azimut Holding and Guardian Capital

Assuming the 90 days horizon Azimut Holding SpA is expected to generate 2.83 times more return on investment than Guardian Capital. However, Azimut Holding is 2.83 times more volatile than Guardian Capital Group. It trades about 0.12 of its potential returns per unit of risk. Guardian Capital Group is currently generating about -0.06 per unit of risk. If you would invest  2,392  in Azimut Holding SpA on December 30, 2024 and sell it today you would earn a total of  598.00  from holding Azimut Holding SpA or generate 25.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.32%
Values	Daily Returns

Azimut Holding SpA  vs.  Guardian Capital Group

Azimut Holding SpA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Azimut Holding SpA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical indicators, Azimut Holding reported solid returns over the last few months and may actually be approaching a breakup point.

Guardian Capital

Risk-Adjusted Performance

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 nearly stable basic indicators, Guardian Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Azimut Holding and Guardian Capital

The main advantage of trading using opposite Azimut Holding and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azimut Holding 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 Azimut Holding SpA 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.