Correlation Between Guidepath(r) Managed and Horizon Active
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Horizon Active 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 Horizon Active 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 Horizon Active Risk, you can compare the effects of market volatilities on Guidepath(r) Managed and Horizon Active 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 Horizon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Horizon Active.
Diversification Opportunities for Guidepath(r) Managed and Horizon Active
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guidepath(r) and Horizon is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Horizon Active Risk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Active Risk 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 Horizon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Active Risk has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Horizon Active go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and Horizon Active
Assuming the 90 days horizon Guidepath(r) Managed is expected to generate 1.99 times less return on investment than Horizon Active. But when comparing it to its historical volatility, Guidepath Managed Futures is 1.08 times less risky than Horizon Active. It trades about 0.14 of its potential returns per unit of risk. Horizon Active Risk is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,658 in Horizon Active Risk on September 3, 2024 and sell it today you would earn a total of 84.00 from holding Horizon Active Risk or generate 3.16% 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. Horizon Active Risk
Performance |
| Timeline |
| Guidepath Managed Futures |
| Horizon Active Risk |
Guidepath(r) Managed and Horizon Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and Horizon Active
The main advantage of trading using opposite Guidepath(r) Managed and Horizon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed position performs unexpectedly, Horizon Active 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 Horizon Active will offset losses from the drop in Horizon Active's long position.| Guidepath(r) Managed vs. Ivy Science And | Guidepath(r) Managed vs. Allianzgi Technology Fund | Guidepath(r) Managed vs. Blackrock Science Technology | Guidepath(r) Managed vs. Technology Ultrasector Profund |
| Horizon Active vs. Science Technology Fund | Horizon Active vs. Dreyfus Technology Growth | Horizon Active vs. Allianzgi Technology Fund | Horizon Active vs. Biotechnology Ultrasector Profund |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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