Correlation Between First National and Guardian Capital
Can any of the company-specific risk be diversified away by investing in both First National and Guardian Capital 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 First National and Guardian Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First National Financial and Guardian Capital Group, you can compare the effects of market volatilities on First National and Guardian Capital 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 First National with a short position of Guardian Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of First National and Guardian Capital.
Diversification Opportunities for First National and Guardian Capital
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between First and Guardian is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding First National Financial and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital and First National 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 First National Financial are associated (or correlated) with Guardian Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Capital has no effect on the direction of First National i.e., First National and Guardian Capital go up and down completely randomly.
Pair Corralation between First National and Guardian Capital
Assuming the 90 days horizon First National is expected to generate 53.89 times less return on investment than Guardian Capital. But when comparing it to its historical volatility, First National Financial is 29.3 times less risky than Guardian Capital. It trades about 0.08 of its potential returns per unit of risk. Guardian Capital Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,301 in Guardian Capital Group on July 27, 2025 and sell it today you would earn a total of 2,397 from holding Guardian Capital Group or generate 55.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First National Financial vs. Guardian Capital Group
Performance |
| Timeline |
| First National Financial |
| Guardian Capital |
First National and Guardian Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First National and Guardian Capital
The main advantage of trading using opposite First National and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First National position performs unexpectedly, Guardian Capital 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 Capital will offset losses from the drop in Guardian Capital's long position.| First National vs. EQB Inc | First National vs. goeasy | First National vs. Sprott Inc | First National vs. MCAN Mortgage |
| Guardian Capital vs. Uniteds Limited | Guardian Capital vs. Laurentian Bank | Guardian Capital vs. Cymbria | Guardian Capital vs. Clairvest Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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