Correlation Between Guidepath(r) Managed and Putman Absolute
Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Putman Absolute 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 Putman Absolute 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 Putman Absolute Return, you can compare the effects of market volatilities on Guidepath(r) Managed and Putman Absolute 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 Putman Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Putman Absolute.
Diversification Opportunities for Guidepath(r) Managed and Putman Absolute
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidepath(r) and Putman is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Putman Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putman Absolute Return 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 Putman Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putman Absolute Return has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Putman Absolute go up and down completely randomly.
Pair Corralation between Guidepath(r) Managed and Putman Absolute
Assuming the 90 days horizon Guidepath Managed Futures is expected to generate 1.58 times more return on investment than Putman Absolute. However, Guidepath(r) Managed is 1.58 times more volatile than Putman Absolute Return. It trades about 0.14 of its potential returns per unit of risk. Putman Absolute Return is currently generating about 0.09 per unit of risk. If you would invest 768.00 in Guidepath Managed Futures on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Guidepath Managed Futures or generate 1.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guidepath Managed Futures vs. Putman Absolute Return
Performance |
| Timeline |
| Guidepath Managed Futures |
| Putman Absolute Return |
Guidepath(r) Managed and Putman Absolute Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath(r) Managed and Putman Absolute
The main advantage of trading using opposite Guidepath(r) Managed and Putman Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Managed position performs unexpectedly, Putman Absolute 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 Putman Absolute will offset losses from the drop in Putman Absolute'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 |
| Putman Absolute vs. Blackrock Inflation Protected | Putman Absolute vs. Ab Bond Inflation | Putman Absolute vs. The Hartford Inflation | Putman Absolute vs. Guidepath 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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