Correlation Between Guidepath(r) Growth and Guidemark

Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Growth and Guidemark 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) Growth and Guidemark into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guidepath Growth Allocation and Guidemark E Fixed, you can compare the effects of market volatilities on Guidepath(r) Growth and Guidemark 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) Growth with a short position of Guidemark. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Growth and Guidemark.

Diversification Opportunities for Guidepath(r) Growth and Guidemark

-0.61

Correlation Coefficient

Guidepath(r) Growth  Guidemark

Excellent diversification

The 3 months correlation between Guidepath(r) and Guidemark is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Growth Allocation and Guidemark E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark E Fixed and Guidepath(r) Growth 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 Growth Allocation are associated (or correlated) with Guidemark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark E Fixed has no effect on the direction of Guidepath(r) Growth i.e., Guidepath(r) Growth and Guidemark go up and down completely randomly.

Pair Corralation between Guidepath(r) Growth and Guidemark

Assuming the 90 days horizon Guidepath Growth Allocation is expected to generate 2.33 times more return on investment than Guidemark. However, Guidepath(r) Growth is 2.33 times more volatile than Guidemark E Fixed. It trades about 0.17 of its potential returns per unit of risk. Guidemark E Fixed is currently generating about -0.04 per unit of risk. If you would invest  1,768  in Guidepath Growth Allocation on September 2, 2024 and sell it today you would earn a total of  136.00  from holding Guidepath Growth Allocation or generate 7.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Guidepath Growth Allocation  vs.  Guidemark E Fixed

Guidepath Growth All

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Growth Allocation are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guidepath(r) Growth may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Guidemark E Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guidemark E Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Guidemark is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guidepath(r) Growth and Guidemark

The main advantage of trading using opposite Guidepath(r) Growth and Guidemark positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath(r) Growth position performs unexpectedly, Guidemark 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 will offset losses from the drop in Guidemark's long position.

The idea behind Guidepath Growth Allocation and Guidemark E Fixed 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.

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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.