Correlation Between Morien Resources and Guardian Capital

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

By analyzing existing cross correlation between Morien Resources Corp and Guardian Capital Group, you can compare the effects of market volatilities on Morien Resources and Guardian Capital 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 Morien Resources with a short position of Guardian Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Morien Resources and Guardian Capital.

Diversification Opportunities for Morien Resources and Guardian Capital

0.48

Correlation Coefficient

Morien Resources  Guardian Capital

Very weak diversification

The 3 months correlation between Morien and Guardian is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Morien Resources Corp and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital and Morien Resources 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 Morien Resources Corp are associated (or correlated) with Guardian Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Capital has no effect on the direction of Morien Resources i.e., Morien Resources and Guardian Capital go up and down completely randomly.

Pair Corralation between Morien Resources and Guardian Capital

Assuming the 90 days horizon Morien Resources Corp is expected to generate 4.43 times more return on investment than Guardian Capital. However, Morien Resources is 4.43 times more volatile than Guardian Capital Group. It trades about 0.08 of its potential returns per unit of risk. Guardian Capital Group is currently generating about 0.11 per unit of risk. If you would invest  23.00  in Morien Resources Corp on December 3, 2024 and sell it today you would earn a total of  3.00  from holding Morien Resources Corp or generate 13.04% return on investment over 90 days.

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

Morien Resources Corp  vs.  Guardian Capital Group

Morien Resources Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Morien Resources Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Morien Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Guardian Capital

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Capital Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Guardian Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Morien Resources and Guardian Capital

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

The idea behind Morien Resources Corp and Guardian Capital Group 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.