Correlation Between Guaranty Bancshares, and First Trust

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

By analyzing existing cross correlation between Guaranty Bancshares, and First Trust Lunt, you can compare the effects of market volatilities on Guaranty Bancshares, and First Trust 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 Guaranty Bancshares, with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guaranty Bancshares, and First Trust.

Diversification Opportunities for Guaranty Bancshares, and First Trust

0.82

Correlation Coefficient

Guaranty Bancshares,  First Trust

Very poor diversification

The 3 months correlation between Guaranty and First is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Bancshares, and First Trust Lunt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Lunt and Guaranty Bancshares, 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 Guaranty Bancshares, are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Lunt has no effect on the direction of Guaranty Bancshares, i.e., Guaranty Bancshares, and First Trust go up and down completely randomly.

Pair Corralation between Guaranty Bancshares, and First Trust

Given the investment horizon of 90 days Guaranty Bancshares, is expected to generate 1.18 times less return on investment than First Trust. In addition to that, Guaranty Bancshares, is 2.13 times more volatile than First Trust Lunt. It trades about 0.02 of its total potential returns per unit of risk. First Trust Lunt is currently generating about 0.04 per unit of volatility. If you would invest  2,744  in First Trust Lunt on September 20, 2024 and sell it today you would earn a total of  522.00  from holding First Trust Lunt or generate 19.02% return on investment over 90 days.

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

Guaranty Bancshares,  vs.  First Trust Lunt

Guaranty Bancshares,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Bancshares, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Guaranty Bancshares, may actually be approaching a critical reversion point that can send shares even higher in January 2025.

First Trust Lunt

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust Lunt are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, First Trust is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Guaranty Bancshares, and First Trust

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

The idea behind Guaranty Bancshares, and First Trust Lunt 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.