Correlation Between Guaranty Bancshares, and RiverFront Strategic

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

By analyzing existing cross correlation between Guaranty Bancshares, and RiverFront Strategic Income, you can compare the effects of market volatilities on Guaranty Bancshares, and RiverFront Strategic 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 RiverFront Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guaranty Bancshares, and RiverFront Strategic.

Diversification Opportunities for Guaranty Bancshares, and RiverFront Strategic

0.01

Correlation Coefficient

Guaranty Bancshares,  RiverFront Strategic

Significant diversification

The 3 months correlation between Guaranty and RiverFront is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Bancshares, and RiverFront Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverFront Strategic 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 RiverFront Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverFront Strategic has no effect on the direction of Guaranty Bancshares, i.e., Guaranty Bancshares, and RiverFront Strategic go up and down completely randomly.

Pair Corralation between Guaranty Bancshares, and RiverFront Strategic

Given the investment horizon of 90 days Guaranty Bancshares, is expected to generate 4.39 times more return on investment than RiverFront Strategic. However, Guaranty Bancshares, is 4.39 times more volatile than RiverFront Strategic Income. It trades about 0.14 of its potential returns per unit of risk. RiverFront Strategic Income is currently generating about -0.02 per unit of risk. If you would invest  3,253  in Guaranty Bancshares, on September 19, 2024 and sell it today you would earn a total of  410.00  from holding Guaranty Bancshares, or generate 12.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Guaranty Bancshares,  vs.  RiverFront Strategic Income

Guaranty Bancshares,

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Bancshares, are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Guaranty Bancshares, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

RiverFront Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RiverFront Strategic Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, RiverFront Strategic is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Guaranty Bancshares, and RiverFront Strategic

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

The idea behind Guaranty Bancshares, and RiverFront Strategic Income 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.