Correlation Between Guaranty Trust and Silver Bullet

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

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

Diversification Opportunities for Guaranty Trust and Silver Bullet

0.47

Correlation Coefficient

Guaranty Trust  Silver Bullet

Very weak diversification

The 3 months correlation between Guaranty and Silver is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Trust Holding and Silver Bullet Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bullet Data and Guaranty Trust 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 Trust Holding are associated (or correlated) with Silver Bullet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bullet Data has no effect on the direction of Guaranty Trust i.e., Guaranty Trust and Silver Bullet go up and down completely randomly.

Pair Corralation between Guaranty Trust and Silver Bullet

Assuming the 90 days trading horizon Guaranty Trust Holding is expected to generate 0.79 times more return on investment than Silver Bullet. However, Guaranty Trust Holding is 1.27 times less risky than Silver Bullet. It trades about 0.17 of its potential returns per unit of risk. Silver Bullet Data is currently generating about 0.08 per unit of risk. If you would invest  171.00  in Guaranty Trust Holding on October 24, 2024 and sell it today you would earn a total of  43.00  from holding Guaranty Trust Holding or generate 25.15% return on investment over 90 days.

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

Guaranty Trust Holding  vs.  Silver Bullet Data

Guaranty Trust Holding

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guaranty Trust Holding are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady essential indicators, Guaranty Trust disclosed solid returns over the last few months and may actually be approaching a breakup point.

Silver Bullet Data

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Bullet Data are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Silver Bullet unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guaranty Trust and Silver Bullet

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

The idea behind Guaranty Trust Holding and Silver Bullet Data 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.