Correlation Between WaveFront All and Guardian Investment

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

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

Diversification Opportunities for WaveFront All and Guardian Investment

0.52

Correlation Coefficient

WaveFront All  Guardian Investment

Very weak diversification

The 3 months correlation between WaveFront and Guardian is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding WaveFront All Weather Alternat and Guardian Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Investment Grade and WaveFront All 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 WaveFront All Weather Alternative are associated (or correlated) with Guardian Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Investment Grade has no effect on the direction of WaveFront All i.e., WaveFront All and Guardian Investment go up and down completely randomly.

Pair Corralation between WaveFront All and Guardian Investment

Assuming the 90 days trading horizon WaveFront All Weather Alternative is expected to generate 3.01 times more return on investment than Guardian Investment. However, WaveFront All is 3.01 times more volatile than Guardian Investment Grade. It trades about 0.17 of its potential returns per unit of risk. Guardian Investment Grade is currently generating about 0.0 per unit of risk. If you would invest  1,911  in WaveFront All Weather Alternative on April 20, 2025 and sell it today you would earn a total of  133.00  from holding WaveFront All Weather Alternative or generate 6.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

WaveFront All Weather Alternat  vs.  Guardian Investment Grade

WaveFront All Weather

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WaveFront All Weather Alternative are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of very unfluctuating basic indicators, WaveFront All may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with WaveFront All and Guardian Investment

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

The idea behind WaveFront All Weather Alternative and Guardian Investment Grade 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.