Correlation Between Guardian Investment and CI Synergy

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

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

Diversification Opportunities for Guardian Investment and CI Synergy

0.7

Correlation Coefficient

Guardian Investment  CI Synergy

Poor diversification

The 3 months correlation between Guardian and 0P000075Q1 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Investment Grade and CI Synergy American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Synergy American and Guardian Investment 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 Investment Grade are associated (or correlated) with CI Synergy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Synergy American has no effect on the direction of Guardian Investment i.e., Guardian Investment and CI Synergy go up and down completely randomly.

Pair Corralation between Guardian Investment and CI Synergy

Assuming the 90 days trading horizon Guardian Investment Grade is expected to under-perform the CI Synergy. But the fund apears to be less risky and, when comparing its historical volatility, Guardian Investment Grade is 6.14 times less risky than CI Synergy. The fund trades about -0.29 of its potential returns per unit of risk. The CI Synergy American is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  4,246  in CI Synergy American on October 26, 2024 and sell it today you would earn a total of  33.00  from holding CI Synergy American or generate 0.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	84.21%
Values	Daily Returns

Guardian Investment Grade  vs.  CI Synergy American

Guardian Investment Grade

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Investment Grade are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Guardian Investment is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

CI Synergy American

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Synergy American are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, CI Synergy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Guardian Investment and CI Synergy

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

The idea behind Guardian Investment Grade and CI Synergy American 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.