Correlation Between Guardian and Guardian International

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

By analyzing existing cross correlation between Guardian i3 Global and Guardian International Equity, you can compare the effects of market volatilities on Guardian and Guardian International 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 with a short position of Guardian International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian and Guardian International.

Diversification Opportunities for Guardian and Guardian International

-0.51

Correlation Coefficient

Guardian  Guardian International

Excellent diversification

The 3 months correlation between Guardian and Guardian is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Guardian i3 Global and Guardian International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian International and Guardian 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 i3 Global are associated (or correlated) with Guardian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian International has no effect on the direction of Guardian i.e., Guardian and Guardian International go up and down completely randomly.

Pair Corralation between Guardian and Guardian International

Assuming the 90 days trading horizon Guardian i3 Global is expected to generate 1.51 times more return on investment than Guardian International. However, Guardian is 1.51 times more volatile than Guardian International Equity. It trades about 0.13 of its potential returns per unit of risk. Guardian International Equity is currently generating about 0.05 per unit of risk. If you would invest  2,207  in Guardian i3 Global on September 14, 2024 and sell it today you would earn a total of  874.00  from holding Guardian i3 Global or generate 39.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.63%
Values	Daily Returns

Guardian i3 Global  vs.  Guardian International Equity

Guardian i3 Global

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian i3 Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Guardian may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Guardian International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardian International Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Guardian International 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 and Guardian International

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

The idea behind Guardian i3 Global and Guardian International Equity 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.