Correlation Between Guidepath(r) Managed and American High
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and American High 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 Guidepath(r) Managed and American High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidepath Managed Futures and American High Income, you can compare the effects of market volatilities on Guidepath(r) Managed and American High 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 Guidepath(r) Managed with a short position of American High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and American High.
Diversification Opportunities for Guidepath(r) Managed and American High
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guidepath(r) and American is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and American High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American High Income and Guidepath(r) Managed 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 Guidepath Managed Futures are associated (or correlated) with American High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American High Income has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and American High go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and American High
Assuming the 90 days horizon Guidepath Managed Futures is expected to under-perform the American High. In addition to that, Guidepath(r) Managed is 3.77 times more volatile than American High Income. It trades about -0.06 of its total potential returns per unit of risk. American High Income is currently generating about 0.19 per unit of volatility. If you would invest 917.00 in American High Income on September 1, 2024 and sell it today you would earn a total of 68.00 from holding American High Income or generate 7.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidepath Managed Futures vs. American High Income
Performance |
| Timeline |
| Guidepath Managed Futures |
| American High Income |
Guidepath(r) Managed and American High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and American High
The main advantage of trading using opposite Guidepath(r) Managed and American High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed position performs unexpectedly, American High 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 American High will offset losses from the drop in American High's long position.| Guidepath(r) Managed vs. Pimco Income Strategy | Guidepath(r) Managed vs. American Balanced Fund | Guidepath(r) Managed vs. Nuveen Real Asset | Guidepath(r) Managed vs. New Economy Fund |
| American High vs. Income Fund Of | American High vs. New World Fund | American High vs. American Mutual Fund | American High vs. American Mutual Fund |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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