Correlation Between Absolute Convertible and Guidepath Managed
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Guidepath Managed 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 Absolute Convertible and Guidepath Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Guidepath Managed Futures, you can compare the effects of market volatilities on Absolute Convertible and Guidepath Managed 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 Absolute Convertible with a short position of Guidepath Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Guidepath Managed.
Diversification Opportunities for Absolute Convertible and Guidepath Managed
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Absolute and Guidepath is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Guidepath Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Guidepath Managed go up and down completely randomly.
Pair Corralation between Absolute Convertible and Guidepath Managed
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.07 times more return on investment than Guidepath Managed. However, Absolute Convertible Arbitrage is 15.16 times less risky than Guidepath Managed. It trades about 0.6 of its potential returns per unit of risk. Guidepath Managed Futures is currently generating about -0.08 per unit of risk. If you would invest 1,110 in Absolute Convertible Arbitrage on September 13, 2024 and sell it today you would earn a total of 41.00 from holding Absolute Convertible Arbitrage or generate 3.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Guidepath Managed Futures
Performance |
| Timeline |
| Absolute Convertible |
| Guidepath Managed Futures |
Absolute Convertible and Guidepath Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Guidepath Managed
The main advantage of trading using opposite Absolute Convertible and Guidepath Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Guidepath Managed 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 Guidepath Managed will offset losses from the drop in Guidepath Managed's long position.| Absolute Convertible vs. Advent Claymore Convertible | Absolute Convertible vs. Fidelity Sai Convertible | Absolute Convertible vs. Virtus Convertible | Absolute Convertible vs. Putnam Convertible Incm Gwth |
| Guidepath Managed vs. T Rowe Price | Guidepath Managed vs. Oklahoma Municipal Fund | Guidepath Managed vs. Baird Strategic Municipal | Guidepath Managed vs. Transamerica Intermediate Muni |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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