Correlation Between Guardian Directed and Dynamic Active

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

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

Diversification Opportunities for Guardian Directed and Dynamic Active

0.68

Correlation Coefficient

Guardian Directed  Dynamic Active

Poor diversification

The 3 months correlation between Guardian and Dynamic is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Directed Premium and Dynamic Active Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynamic Active Canadian and Guardian Directed 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 Directed Premium are associated (or correlated) with Dynamic Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynamic Active Canadian has no effect on the direction of Guardian Directed i.e., Guardian Directed and Dynamic Active go up and down completely randomly.

Pair Corralation between Guardian Directed and Dynamic Active

Assuming the 90 days trading horizon Guardian Directed is expected to generate 3.39 times less return on investment than Dynamic Active. In addition to that, Guardian Directed is 1.81 times more volatile than Dynamic Active Canadian. It trades about 0.06 of its total potential returns per unit of risk. Dynamic Active Canadian is currently generating about 0.35 per unit of volatility. If you would invest  3,726  in Dynamic Active Canadian on April 24, 2025 and sell it today you would earn a total of  327.00  from holding Dynamic Active Canadian or generate 8.78% return on investment over 90 days.

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

Guardian Directed Premium  vs.  Dynamic Active Canadian

Guardian Directed Premium

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Directed Premium are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guardian Directed is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Dynamic Active Canadian

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dynamic Active Canadian are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Dynamic Active may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Guardian Directed and Dynamic Active

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

The idea behind Guardian Directed Premium and Dynamic Active Canadian 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.