Correlation Between Guardian Capital and Azimut Holding

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

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

Diversification Opportunities for Guardian Capital and Azimut Holding

0.4

Correlation Coefficient

Guardian Capital  Azimut Holding

Very weak diversification

The 3 months correlation between Guardian and Azimut is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and Azimut Holding SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azimut Holding SpA and Guardian Capital 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 Capital Group are associated (or correlated) with Azimut Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azimut Holding SpA has no effect on the direction of Guardian Capital i.e., Guardian Capital and Azimut Holding go up and down completely randomly.

Pair Corralation between Guardian Capital and Azimut Holding

Assuming the 90 days horizon Guardian Capital Group is expected to under-perform the Azimut Holding. But the pink sheet apears to be less risky and, when comparing its historical volatility, Guardian Capital Group is 2.83 times less risky than Azimut Holding. The pink sheet trades about -0.06 of its potential returns per unit of risk. The Azimut Holding SpA is currently generating about 0.12 of returns per unit of risk over similar time horizon. 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

Guardian Capital Group  vs.  Azimut Holding SpA

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.

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.

Pair Trading with Guardian Capital and Azimut Holding

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

The idea behind Guardian Capital Group and Azimut Holding SpA 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.