Correlation Between Urbana and Guardian Capital

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

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

Diversification Opportunities for Urbana and Guardian Capital

0.59

Correlation Coefficient

Urbana  Guardian Capital

Very weak diversification

The 3 months correlation between Urbana and Guardian is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Urbana and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital and Urbana 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 Urbana 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 Urbana i.e., Urbana and Guardian Capital go up and down completely randomly.

Pair Corralation between Urbana and Guardian Capital

Assuming the 90 days horizon Urbana is expected to generate 0.63 times more return on investment than Guardian Capital. However, Urbana is 1.6 times less risky than Guardian Capital. It trades about 0.26 of its potential returns per unit of risk. Guardian Capital Group is currently generating about 0.05 per unit of risk. If you would invest  420.00  in Urbana on May 6, 2025 and sell it today you would earn a total of  83.00  from holding Urbana or generate 19.76% return on investment over 90 days.

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

Urbana  vs.  Guardian Capital Group

Urbana

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Urbana are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Urbana reported solid returns over the last few months and may actually be approaching a breakup point.

Guardian Capital

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guardian Capital Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guardian Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Urbana and Guardian Capital

The main advantage of trading using opposite Urbana and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urbana 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.

The idea behind Urbana and Guardian Capital Group 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.