Correlation Between Guidepath(r) Managed and Archer Income

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

By analyzing existing cross correlation between Guidepath Managed Futures and Archer Income Fund, you can compare the effects of market volatilities on Guidepath(r) Managed and Archer Income 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) Managed with a short position of Archer Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Archer Income.

Diversification Opportunities for Guidepath(r) Managed and Archer Income

-0.69

Correlation Coefficient

Guidepath(r) Managed  Archer Income

Excellent diversification

The 3 months correlation between Guidepath(r) and Archer is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Archer Income Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archer Income and Guidepath(r) Managed 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 Managed Futures are associated (or correlated) with Archer Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archer Income has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Archer Income go up and down completely randomly.

Pair Corralation between Guidepath(r) Managed and Archer Income

Assuming the 90 days horizon Guidepath Managed Futures is expected to under-perform the Archer Income. In addition to that, Guidepath(r) Managed is 6.94 times more volatile than Archer Income Fund. It trades about -0.11 of its total potential returns per unit of risk. Archer Income Fund is currently generating about 0.21 per unit of volatility. If you would invest  1,788  in Archer Income Fund on December 23, 2024 and sell it today you would earn a total of  27.00  from holding Archer Income Fund or generate 1.51% return on investment over 90 days.

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

Guidepath Managed Futures  vs.  Archer Income Fund

Guidepath Managed Futures

Risk-Adjusted Performance

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(r) Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Archer Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Archer Income Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Archer Income 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) Managed and Archer Income

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

The idea behind Guidepath Managed Futures and Archer Income Fund 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.