Correlation Between Guardian Directed and CI Marret

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

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

Diversification Opportunities for Guardian Directed and CI Marret

0.66

Correlation Coefficient

Guardian Directed  CI Marret

Poor diversification

The 3 months correlation between Guardian and CMAR is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Directed Equity and CI Marret Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Marret Alternative and Guardian Directed 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 Directed Equity are associated (or correlated) with CI Marret. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Marret Alternative has no effect on the direction of Guardian Directed i.e., Guardian Directed and CI Marret go up and down completely randomly.

Pair Corralation between Guardian Directed and CI Marret

Assuming the 90 days trading horizon Guardian Directed Equity is expected to under-perform the CI Marret. In addition to that, Guardian Directed is 1.4 times more volatile than CI Marret Alternative. It trades about -0.04 of its total potential returns per unit of risk. CI Marret Alternative is currently generating about 0.08 per unit of volatility. If you would invest  1,811  in CI Marret Alternative on December 1, 2024 and sell it today you would earn a total of  27.00  from holding CI Marret Alternative or generate 1.49% return on investment over 90 days.

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

Guardian Directed Equity  vs.  CI Marret Alternative

Guardian Directed Equity

Risk-Adjusted Performance

Very Weak

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

CI Marret Alternative

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CI Marret Alternative are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, CI Marret is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Guardian Directed and CI Marret

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

The idea behind Guardian Directed Equity and CI Marret Alternative 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.