Correlation Between Guardian Investment and Fidelity Tactical

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

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

Diversification Opportunities for Guardian Investment and Fidelity Tactical

0.44

Correlation Coefficient

Guardian Investment  Fidelity Tactical

Very weak diversification

The 3 months correlation between Guardian and Fidelity is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Investment Grade and Fidelity Tactical High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Tactical High and Guardian Investment 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 Investment Grade are associated (or correlated) with Fidelity Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Tactical High has no effect on the direction of Guardian Investment i.e., Guardian Investment and Fidelity Tactical go up and down completely randomly.

Pair Corralation between Guardian Investment and Fidelity Tactical

Assuming the 90 days trading horizon Guardian Investment is expected to generate 201.9 times less return on investment than Fidelity Tactical. But when comparing it to its historical volatility, Guardian Investment Grade is 2.82 times less risky than Fidelity Tactical. It trades about 0.0 of its potential returns per unit of risk. Fidelity Tactical High is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  961.00  in Fidelity Tactical High on April 22, 2025 and sell it today you would earn a total of  129.00  from holding Fidelity Tactical High or generate 13.42% return on investment over 90 days.

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

Guardian Investment Grade  vs.  Fidelity Tactical High

Guardian Investment Grade

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guardian Investment Grade has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Guardian Investment is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Fidelity Tactical High

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Tactical High are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak basic indicators, Fidelity Tactical displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guardian Investment and Fidelity Tactical

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

The idea behind Guardian Investment Grade and Fidelity Tactical High 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.