Correlation Between Guidemark(r) World and Guidepath(r) Tactical

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

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

Diversification Opportunities for Guidemark(r) World and Guidepath(r) Tactical

-0.39

Correlation Coefficient

Guidemark(r) World  Guidepath(r) Tactical

Very good diversification

The 3 months correlation between Guidemark(r) and Guidepath(r) is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark World Ex Us and Guidepath Tactical Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath(r) Tactical and Guidemark(r) World 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 Guidemark World Ex Us are associated (or correlated) with Guidepath(r) Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath(r) Tactical has no effect on the direction of Guidemark(r) World i.e., Guidemark(r) World and Guidepath(r) Tactical go up and down completely randomly.

Pair Corralation between Guidemark(r) World and Guidepath(r) Tactical

Assuming the 90 days horizon Guidemark World Ex Us is expected to under-perform the Guidepath(r) Tactical. In addition to that, Guidemark(r) World is 1.12 times more volatile than Guidepath Tactical Allocation. It trades about -0.03 of its total potential returns per unit of risk. Guidepath Tactical Allocation is currently generating about 0.23 per unit of volatility. If you would invest  1,377  in Guidepath Tactical Allocation on September 1, 2024 and sell it today you would earn a total of  144.00  from holding Guidepath Tactical Allocation or generate 10.46% return on investment over 90 days.

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

Guidemark World Ex Us  vs.  Guidepath Tactical Allocation

Guidemark World Ex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guidemark World Ex Us has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Guidemark(r) World is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidepath(r) Tactical

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Tactical Allocation are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guidepath(r) Tactical may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Guidemark(r) World and Guidepath(r) Tactical

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

The idea behind Guidemark World Ex Us and Guidepath Tactical Allocation 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..