Correlation Between Roadman Investments and Guardian Capital

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

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

Diversification Opportunities for Roadman Investments and Guardian Capital

0.0

Correlation Coefficient

Roadman Investments  Guardian Capital

Pay attention - limited upside

The 3 months correlation between Roadman and Guardian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Roadman Investments 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 Roadman 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 Roadman Investments 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 Roadman Investments i.e., Roadman Investments and Guardian Capital go up and down completely randomly.

Pair Corralation between Roadman Investments and Guardian Capital

Assuming the 90 days horizon Roadman Investments Corp is expected to generate 24.03 times more return on investment than Guardian Capital. However, Roadman Investments is 24.03 times more volatile than Guardian Capital Group. It trades about 0.06 of its potential returns per unit of risk. Guardian Capital Group is currently generating about 0.02 per unit of risk. If you would invest  3.00  in Roadman Investments Corp on September 18, 2024 and sell it today you would earn a total of  84.91  from holding Roadman Investments Corp or generate 2830.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	69.35%
Values	Daily Returns

Roadman Investments Corp  vs.  Guardian Capital Group

Roadman Investments Corp

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Roadman Investments Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Roadman Investments is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Guardian Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guardian Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Guardian Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Roadman Investments and Guardian Capital

The main advantage of trading using opposite Roadman Investments and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roadman Investments 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 Roadman Investments 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.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.