Correlation Between Smead Value and Guidemark Large
Can any of the company-specific risk be diversified away by investing in both Smead Value and Guidemark 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 Smead Value and Guidemark Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smead Value Fund and Guidemark Large Cap, you can compare the effects of market volatilities on Smead Value and Guidemark 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 Smead Value with a short position of Guidemark Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smead Value and Guidemark Large.
Diversification Opportunities for Smead Value and Guidemark Large
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Smead and Guidemark is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Smead Value Fund 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 Smead Value 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 Smead Value Fund are associated (or correlated) with Guidemark 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 Smead Value i.e., Smead Value and Guidemark Large go up and down completely randomly.
Pair Corralation between Smead Value and Guidemark Large
Assuming the 90 days horizon Smead Value Fund is expected to generate 0.97 times more return on investment than Guidemark Large. However, Smead Value Fund is 1.03 times less risky than Guidemark Large. It trades about 0.15 of its potential returns per unit of risk. Guidemark Large Cap is currently generating about -0.18 per unit of risk. If you would invest 8,371 in Smead Value Fund on August 28, 2024 and sell it today you would earn a total of 215.00 from holding Smead Value Fund or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smead Value Fund vs. Guidemark Large Cap
Performance |
| Timeline |
| Smead Value Fund |
| Guidemark Large Cap |
Smead Value and Guidemark Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smead Value and Guidemark Large
The main advantage of trading using opposite Smead Value and Guidemark Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smead Value position performs unexpectedly, Guidemark 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 Large will offset losses from the drop in Guidemark Large's long position.| Smead Value vs. Oppenheimer International Growth | Smead Value vs. Aquagold International | Smead Value vs. Morningstar Unconstrained Allocation | Smead Value vs. Thrivent High Yield |
| Guidemark Large vs. Short Duration Inflation | Guidemark Large vs. Deutsche Global Inflation | Guidemark Large vs. Ab Bond Inflation | Guidemark Large vs. Aqr 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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