Correlation Between Stellar and Guidepath(r) Managed

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Can any of the company-specific risk be diversified away by investing in both Stellar and Guidepath(r) Managed 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 Stellar and Guidepath(r) Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Guidepath Managed Futures, you can compare the effects of market volatilities on Stellar and Guidepath(r) Managed 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 Stellar with a short position of Guidepath(r) Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Guidepath(r) Managed.

Diversification Opportunities for Stellar and Guidepath(r) Managed

0.5
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Stellar and Guidepath(r) is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures and Stellar 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 Stellar are associated (or correlated) with Guidepath(r) Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Stellar i.e., Stellar and Guidepath(r) Managed go up and down completely randomly.

Pair Corralation between Stellar and Guidepath(r) Managed

Assuming the 90 days trading horizon Stellar is expected to generate 10.06 times more return on investment than Guidepath(r) Managed. However, Stellar is 10.06 times more volatile than Guidepath Managed Futures. It trades about 0.11 of its potential returns per unit of risk. Guidepath Managed Futures is currently generating about -0.02 per unit of risk. If you would invest  9.07  in Stellar on October 19, 2024 and sell it today you would earn a total of  39.93  from holding Stellar or generate 440.24% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy60.0%
ValuesDaily Returns

Stellar  vs.  Guidepath Managed Futures

 Performance 
       Timeline  
Stellar 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Stellar exhibited solid returns over the last few months and may actually be approaching a breakup point.
Guidepath Managed Futures 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Managed Futures are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Guidepath(r) Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Stellar and Guidepath(r) Managed Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stellar and Guidepath(r) Managed

The main advantage of trading using opposite Stellar and Guidepath(r) Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Guidepath(r) Managed 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 Guidepath(r) Managed will offset losses from the drop in Guidepath(r) Managed's long position.
The idea behind Stellar and Guidepath Managed Futures pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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