Correlation Between Nasdaq and Guardian International

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

By analyzing existing cross correlation between Nasdaq Inc and Guardian International Equity, you can compare the effects of market volatilities on Nasdaq and Guardian International 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 Nasdaq with a short position of Guardian International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Guardian International.

Diversification Opportunities for Nasdaq and Guardian International

0.51

Correlation Coefficient

Nasdaq  Guardian International

Very weak diversification

The 3 months correlation between Nasdaq and Guardian is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Guardian International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian International and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Guardian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian International has no effect on the direction of Nasdaq i.e., Nasdaq and Guardian International go up and down completely randomly.

Pair Corralation between Nasdaq and Guardian International

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the Guardian International. In addition to that, Nasdaq is 1.41 times more volatile than Guardian International Equity. It trades about -0.02 of its total potential returns per unit of risk. Guardian International Equity is currently generating about 0.22 per unit of volatility. If you would invest  2,202  in Guardian International Equity on December 4, 2024 and sell it today you would earn a total of  277.00  from holding Guardian International Equity or generate 12.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Nasdaq Inc  vs.  Guardian International Equity

Nasdaq Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Guardian International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian International Equity are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Guardian International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Nasdaq and Guardian International

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

The idea behind Nasdaq Inc and Guardian International Equity 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.