Correlation Between Abr Enhanced and Guidemark Large

Can any of the company-specific risk be diversified away by investing in both Abr Enhanced 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 Abr Enhanced and Guidemark Large into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abr Enhanced Short and Guidemark Large Cap, you can compare the effects of market volatilities on Abr Enhanced 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 Abr Enhanced with a short position of Guidemark Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abr Enhanced and Guidemark Large.

Diversification Opportunities for Abr Enhanced and Guidemark Large

-0.41

Correlation Coefficient

Abr Enhanced  Guidemark Large

Very good diversification

The 3 months correlation between Abr and Guidemark is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Abr Enhanced Short 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 Abr Enhanced 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 Abr Enhanced Short 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 Abr Enhanced i.e., Abr Enhanced and Guidemark Large go up and down completely randomly.

Pair Corralation between Abr Enhanced and Guidemark Large

Assuming the 90 days horizon Abr Enhanced Short is expected to generate 1.5 times more return on investment than Guidemark Large. However, Abr Enhanced is 1.5 times more volatile than Guidemark Large Cap. It trades about 0.08 of its potential returns per unit of risk. Guidemark Large Cap is currently generating about -0.2 per unit of risk. If you would invest  802.00  in Abr Enhanced Short on October 6, 2024 and sell it today you would earn a total of  32.00  from holding Abr Enhanced Short or generate 3.99% return on investment over 90 days.

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

Abr Enhanced Short  vs.  Guidemark Large Cap

Abr Enhanced Short

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Abr Enhanced Short are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Abr Enhanced may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Guidemark Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guidemark Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Abr Enhanced and Guidemark Large

The main advantage of trading using opposite Abr Enhanced and Guidemark Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abr Enhanced 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.

The idea behind Abr Enhanced Short and Guidemark Large Cap 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.