Correlation Between Guardian Directed and Exemplar Growth

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

By analyzing existing cross correlation between Guardian Directed Premium and Exemplar Growth and, you can compare the effects of market volatilities on Guardian Directed and Exemplar Growth 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 Exemplar Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Directed and Exemplar Growth.

Diversification Opportunities for Guardian Directed and Exemplar Growth

0.83

Correlation Coefficient

Guardian Directed  Exemplar Growth

Very poor diversification

The 3 months correlation between Guardian and Exemplar is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Directed Premium and Exemplar Growth and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exemplar Growth 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 Premium are associated (or correlated) with Exemplar Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exemplar Growth has no effect on the direction of Guardian Directed i.e., Guardian Directed and Exemplar Growth go up and down completely randomly.

Pair Corralation between Guardian Directed and Exemplar Growth

Assuming the 90 days trading horizon Guardian Directed Premium is expected to generate 1.57 times more return on investment than Exemplar Growth. However, Guardian Directed is 1.57 times more volatile than Exemplar Growth and. It trades about 0.08 of its potential returns per unit of risk. Exemplar Growth and is currently generating about 0.06 per unit of risk. If you would invest  1,670  in Guardian Directed Premium on October 4, 2024 and sell it today you would earn a total of  469.00  from holding Guardian Directed Premium or generate 28.08% return on investment over 90 days.

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

Guardian Directed Premium  vs.  Exemplar Growth and

Guardian Directed Premium

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Directed Premium are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guardian Directed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Exemplar Growth

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exemplar Growth and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Exemplar Growth 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 Exemplar Growth

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

The idea behind Guardian Directed Premium and Exemplar Growth and 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.