Correlation Between Fidelity Value and Guardian Canadian

Can any of the company-specific risk be diversified away by investing in both Fidelity Value 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 Value 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 Value ETF and Guardian Canadian Focused, you can compare the effects of market volatilities on Fidelity Value 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 Value with a short position of Guardian Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity Value and Guardian Canadian.

Diversification Opportunities for Fidelity Value and Guardian Canadian

0.64

Correlation Coefficient

Fidelity Value  Guardian Canadian

Poor diversification

The 3 months correlation between Fidelity and Guardian is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity Value ETF and Guardian Canadian Focused in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Canadian Focused and Fidelity Value 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 Value ETF 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 Focused has no effect on the direction of Fidelity Value i.e., Fidelity Value and Guardian Canadian go up and down completely randomly.

Pair Corralation between Fidelity Value and Guardian Canadian

Assuming the 90 days trading horizon Fidelity Value is expected to generate 2.53 times less return on investment than Guardian Canadian. In addition to that, Fidelity Value is 1.22 times more volatile than Guardian Canadian Focused. It trades about 0.13 of its total potential returns per unit of risk. Guardian Canadian Focused is currently generating about 0.41 per unit of volatility. If you would invest  2,832  in Guardian Canadian Focused on April 24, 2025 and sell it today you would earn a total of  589.00  from holding Guardian Canadian Focused or generate 20.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

Fidelity Value ETF  vs.  Guardian Canadian Focused

Fidelity Value ETF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Value ETF are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Fidelity Value may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Guardian Canadian Focused

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Canadian Focused are ranked lower than 32 (%) 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 Value and Guardian Canadian

The main advantage of trading using opposite Fidelity Value and Guardian Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity Value 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 Value ETF and Guardian Canadian Focused 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.