Correlation Between Profunds-large Cap and Guidemark(r) Large
Can any of the company-specific risk be diversified away by investing in both Profunds-large Cap and Guidemark(r) Large 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 Profunds-large Cap and Guidemark(r) Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profunds Large Cap Growth and Guidemark Large Cap, you can compare the effects of market volatilities on Profunds-large Cap and Guidemark(r) Large 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 Profunds-large Cap with a short position of Guidemark(r) Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds-large Cap and Guidemark(r) Large.
Diversification Opportunities for Profunds-large Cap and Guidemark(r) Large
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ProFunds-Large and Guidemark(r) is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Large Cap Growth and Guidemark Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Large Cap and Profunds-large Cap 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 Profunds Large Cap Growth are associated (or correlated) with Guidemark(r) Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Large Cap has no effect on the direction of Profunds-large Cap i.e., Profunds-large Cap and Guidemark(r) Large go up and down completely randomly.
Pair Corralation between Profunds-large Cap and Guidemark(r) Large
Assuming the 90 days horizon Profunds Large Cap Growth is expected to generate 1.18 times more return on investment than Guidemark(r) Large. However, Profunds-large Cap is 1.18 times more volatile than Guidemark Large Cap. It trades about 0.13 of its potential returns per unit of risk. Guidemark Large Cap is currently generating about 0.07 per unit of risk. If you would invest 3,151 in Profunds Large Cap Growth on November 2, 2024 and sell it today you would earn a total of 469.00 from holding Profunds Large Cap Growth or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profunds Large Cap Growth vs. Guidemark Large Cap
Performance |
| Timeline |
| Profunds Large Cap |
| Guidemark Large Cap |
Profunds-large Cap and Guidemark(r) Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profunds-large Cap and Guidemark(r) Large
The main advantage of trading using opposite Profunds-large Cap and Guidemark(r) Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds-large Cap position performs unexpectedly, Guidemark(r) Large 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 Guidemark(r) Large will offset losses from the drop in Guidemark(r) Large's long position.| Profunds-large Cap vs. Hennessy Large Cap | Profunds-large Cap vs. T Rowe Price | Profunds-large Cap vs. Angel Oak Financial | Profunds-large Cap vs. Gabelli Global Financial |
| Guidemark(r) Large vs. Ab Small Cap | Guidemark(r) Large vs. Praxis Small Cap | Guidemark(r) Large vs. Glg Intl Small | Guidemark(r) Large vs. Kinetics Small Cap |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |