Correlation Between Altegris Futures and Guidepath Managed
Can any of the company-specific risk be diversified away by investing in both Altegris Futures 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 Altegris Futures and Guidepath Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altegris Futures Evolution and Guidepath Managed Futures, you can compare the effects of market volatilities on Altegris Futures 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 Altegris Futures with a short position of Guidepath Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altegris Futures and Guidepath Managed.
Diversification Opportunities for Altegris Futures and Guidepath Managed
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Altegris and Guidepath is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Altegris Futures Evolution 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 Altegris Futures 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 Altegris Futures Evolution 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 Altegris Futures i.e., Altegris Futures and Guidepath Managed go up and down completely randomly.
Pair Corralation between Altegris Futures and Guidepath Managed
Assuming the 90 days horizon Altegris Futures is expected to generate 1.16 times less return on investment than Guidepath Managed. But when comparing it to its historical volatility, Altegris Futures Evolution is 1.26 times less risky than Guidepath Managed. It trades about 0.17 of its potential returns per unit of risk. Guidepath Managed Futures is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 779.00 in Guidepath Managed Futures on September 17, 2024 and sell it today you would earn a total of 12.00 from holding Guidepath Managed Futures or generate 1.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Altegris Futures Evolution vs. Guidepath Managed Futures
Performance |
Timeline |
Altegris Futures Evo |
Guidepath Managed Futures |
Altegris Futures and Guidepath Managed Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Altegris Futures and Guidepath Managed
The main advantage of trading using opposite Altegris Futures and Guidepath Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altegris Futures 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 Altegris Futures Evolution 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.
Guidepath Managed vs. Guidepath Absolute Return | Guidepath Managed vs. Guidepath Conservative Income | Guidepath Managed vs. Guidepath Flexible Income | Guidepath Managed vs. Guidepath Growth And |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Equity Valuation Check real value of public entities based on technical and fundamental data | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |