Correlation Between Guardian Capital and Clarke

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

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

Diversification Opportunities for Guardian Capital and Clarke

0.62

Correlation Coefficient

Guardian Capital  Clarke

Poor diversification

The 3 months correlation between Guardian and Clarke is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and Clarke Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarke Inc and Guardian Capital 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 Guardian Capital Group are associated (or correlated) with Clarke. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarke Inc has no effect on the direction of Guardian Capital i.e., Guardian Capital and Clarke go up and down completely randomly.

Pair Corralation between Guardian Capital and Clarke

Assuming the 90 days trading horizon Guardian Capital is expected to generate 3.01 times less return on investment than Clarke. In addition to that, Guardian Capital is 1.12 times more volatile than Clarke Inc. It trades about 0.07 of its total potential returns per unit of risk. Clarke Inc is currently generating about 0.25 per unit of volatility. If you would invest  2,250  in Clarke Inc on April 23, 2025 and sell it today you would earn a total of  600.00  from holding Clarke Inc or generate 26.67% return on investment over 90 days.

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

Guardian Capital Group  vs.  Clarke Inc

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 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Guardian Capital may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Clarke Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clarke Inc are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Clarke displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardian Capital and Clarke

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

The idea behind Guardian Capital Group and Clarke Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.