Correlation Between Guardian Capital and Princeton Capital

Can any of the company-specific risk be diversified away by investing in both Guardian Capital and Princeton 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 Guardian Capital and Princeton Capital 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 Princeton Capital, you can compare the effects of market volatilities on Guardian Capital and Princeton 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 Guardian Capital with a short position of Princeton Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Capital and Princeton Capital.

Diversification Opportunities for Guardian Capital and Princeton Capital

-0.49

Correlation Coefficient

Guardian Capital  Princeton Capital

Very good diversification

The 3 months correlation between Guardian and Princeton is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group and Princeton Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Princeton Capital 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 Princeton Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Princeton Capital has no effect on the direction of Guardian Capital i.e., Guardian Capital and Princeton Capital go up and down completely randomly.

Pair Corralation between Guardian Capital and Princeton Capital

Assuming the 90 days horizon Guardian Capital Group is expected to generate 0.33 times more return on investment than Princeton Capital. However, Guardian Capital Group is 3.04 times less risky than Princeton Capital. It trades about 0.07 of its potential returns per unit of risk. Princeton Capital is currently generating about -0.15 per unit of risk. If you would invest  2,760  in Guardian Capital Group on May 12, 2025 and sell it today you would earn a total of  179.00  from holding Guardian Capital Group or generate 6.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Guardian Capital Group  vs.  Princeton Capital

Guardian Capital

Risk-Adjusted Performance

Mild

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. Despite nearly fragile basic indicators, Guardian Capital may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Princeton Capital

Risk-Adjusted Performance

Weakest

Over the last 90 days Princeton Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Guardian Capital and Princeton Capital

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

The idea behind Guardian Capital Group and Princeton Capital 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.