Correlation Between Cardinal Small and Guidepath Managed

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

Diversification Opportunities for Cardinal Small and Guidepath Managed

-0.26
  Correlation Coefficient

Very good diversification

The 3 months correlation between Cardinal and Guidepath is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Small Cap 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 Cardinal Small 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 Cardinal Small Cap are associated (or correlated) with Guidepath 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 Cardinal Small i.e., Cardinal Small and Guidepath Managed go up and down completely randomly.

Pair Corralation between Cardinal Small and Guidepath Managed

If you would invest  787.00  in Guidepath Managed Futures on October 1, 2024 and sell it today you would earn a total of  5.00  from holding Guidepath Managed Futures or generate 0.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cardinal Small Cap  vs.  Guidepath Managed Futures

 Performance 
       Timeline  
Cardinal Small Cap 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cardinal Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Cardinal Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Guidepath Managed Futures 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Guidepath Managed Futures has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Guidepath Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cardinal Small and Guidepath Managed Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cardinal Small and Guidepath Managed

The main advantage of trading using opposite Cardinal Small and Guidepath Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Small position performs unexpectedly, Guidepath 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 Managed will offset losses from the drop in Guidepath Managed's long position.
The idea behind Cardinal Small Cap 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.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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