Correlation Between Guidepath(r) Managed and Global Resources
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Global Resources 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 Global Resources 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 Global Resources Fund, you can compare the effects of market volatilities on Guidepath(r) Managed and Global Resources 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 Global Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Global Resources.
Diversification Opportunities for Guidepath(r) Managed and Global Resources
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guidepath(r) and GLOBAL is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Global Resources Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Resources 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 Global Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Resources has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Global Resources go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and Global Resources
Assuming the 90 days horizon Guidepath Managed Futures is expected to generate 0.68 times more return on investment than Global Resources. However, Guidepath Managed Futures is 1.48 times less risky than Global Resources. It trades about -0.03 of its potential returns per unit of risk. Global Resources Fund is currently generating about -0.05 per unit of risk. If you would invest 786.00 in Guidepath Managed Futures on August 29, 2024 and sell it today you would lose (4.00) from holding Guidepath Managed Futures or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidepath Managed Futures vs. Global Resources Fund
Performance |
| Timeline |
| Guidepath Managed Futures |
| Global Resources |
Guidepath(r) Managed and Global Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and Global Resources
The main advantage of trading using opposite Guidepath(r) Managed and Global Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed position performs unexpectedly, Global Resources 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 Global Resources will offset losses from the drop in Global Resources' long position.| Guidepath(r) Managed vs. Aqr Managed Futures | Guidepath(r) Managed vs. Pimco Trends Managed | Guidepath(r) Managed vs. Pimco Trends Managed | Guidepath(r) Managed vs. Asg Managed Futures |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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