Correlation Between Fidelity High and Guardian Canadian

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

By analyzing existing cross correlation between Fidelity High Quality and Guardian Canadian Sector, you can compare the effects of market volatilities on Fidelity High and Guardian Canadian 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 Fidelity High with a short position of Guardian Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity High and Guardian Canadian.

Diversification Opportunities for Fidelity High and Guardian Canadian

0.88

Correlation Coefficient

Fidelity High  Guardian Canadian

Very poor diversification

The 3 months correlation between Fidelity and Guardian is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity High Quality and Guardian Canadian Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Canadian Sector and Fidelity High 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 Fidelity High Quality are associated (or correlated) with Guardian Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Canadian Sector has no effect on the direction of Fidelity High i.e., Fidelity High and Guardian Canadian go up and down completely randomly.

Pair Corralation between Fidelity High and Guardian Canadian

Assuming the 90 days trading horizon Fidelity High is expected to generate 1.64 times less return on investment than Guardian Canadian. In addition to that, Fidelity High is 1.03 times more volatile than Guardian Canadian Sector. It trades about 0.18 of its total potential returns per unit of risk. Guardian Canadian Sector is currently generating about 0.31 per unit of volatility. If you would invest  2,638  in Guardian Canadian Sector on April 25, 2025 and sell it today you would earn a total of  392.00  from holding Guardian Canadian Sector or generate 14.86% return on investment over 90 days.

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

Fidelity High Quality  vs.  Guardian Canadian Sector

Fidelity High Quality

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity High Quality are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fidelity High may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Guardian Canadian Sector

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Canadian Sector are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Guardian Canadian displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fidelity High and Guardian Canadian

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

The idea behind Fidelity High Quality and Guardian Canadian Sector 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.