Correlation Between Guidepath(r) Managed and Matrix Advisors

Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Matrix Advisors 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 Matrix Advisors 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 Matrix Advisors Value, you can compare the effects of market volatilities on Guidepath(r) Managed and Matrix Advisors 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 Matrix Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Matrix Advisors.

Diversification Opportunities for Guidepath(r) Managed and Matrix Advisors

-0.1

Correlation Coefficient

Guidepath(r) Managed  Matrix Advisors

Good diversification

The 3 months correlation between Guidepath(r) and Matrix is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Matrix Advisors Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matrix Advisors Value 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 Matrix Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matrix Advisors Value has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Matrix Advisors go up and down completely randomly.

Pair Corralation between Guidepath(r) Managed and Matrix Advisors

Assuming the 90 days horizon Guidepath Managed Futures is expected to generate 0.75 times more return on investment than Matrix Advisors. However, Guidepath Managed Futures is 1.33 times less risky than Matrix Advisors. It trades about -0.06 of its potential returns per unit of risk. Matrix Advisors Value is currently generating about -0.09 per unit of risk. If you would invest  789.00  in Guidepath Managed Futures on December 4, 2024 and sell it today you would lose (21.00) from holding Guidepath Managed Futures or give up 2.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	91.53%
Values	Daily Returns

Guidepath Managed Futures  vs.  Matrix Advisors Value

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.

Matrix Advisors Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Matrix Advisors Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Matrix Advisors 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 Matrix Advisors

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

The idea behind Guidepath Managed Futures and Matrix Advisors Value 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.