Correlation Between Intuitive Investments and Guaranty Trust

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

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

Diversification Opportunities for Intuitive Investments and Guaranty Trust

-0.57

Correlation Coefficient

Intuitive Investments  Guaranty Trust

Excellent diversification

The 3 months correlation between Intuitive and Guaranty is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Intuitive Investments Group and Guaranty Trust Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guaranty Trust Holding and Intuitive Investments 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 Intuitive Investments Group are associated (or correlated) with Guaranty Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guaranty Trust Holding has no effect on the direction of Intuitive Investments i.e., Intuitive Investments and Guaranty Trust go up and down completely randomly.

Pair Corralation between Intuitive Investments and Guaranty Trust

Assuming the 90 days trading horizon Intuitive Investments Group is expected to under-perform the Guaranty Trust. But the stock apears to be less risky and, when comparing its historical volatility, Intuitive Investments Group is 1.43 times less risky than Guaranty Trust. The stock trades about -0.21 of its potential returns per unit of risk. The Guaranty Trust Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  175.00  in Guaranty Trust Holding on September 27, 2024 and sell it today you would earn a total of  10.00  from holding Guaranty Trust Holding or generate 5.71% return on investment over 90 days.

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

Intuitive Investments Group  vs.  Guaranty Trust Holding

Intuitive Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intuitive Investments Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Guaranty Trust Holding

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Intuitive Investments and Guaranty Trust

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

The idea behind Intuitive Investments Group and Guaranty Trust Holding 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.