Correlation Between Guidepath(r) Managed and Profunds Ultrashort

Can any of the company-specific risk be diversified away by investing in both Guidepath(r) Managed and Profunds Ultrashort 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 Profunds Ultrashort 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 Profunds Ultrashort Nasdaq 100, you can compare the effects of market volatilities on Guidepath(r) Managed and Profunds Ultrashort 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 Profunds Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Managed and Profunds Ultrashort.

Diversification Opportunities for Guidepath(r) Managed and Profunds Ultrashort

0.51

Correlation Coefficient

Guidepath(r) Managed  Profunds Ultrashort

Very weak diversification

The 3 months correlation between Guidepath(r) and Profunds is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Profunds Ultrashort Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profunds Ultrashort 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 Profunds Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profunds Ultrashort has no effect on the direction of Guidepath(r) Managed i.e., Guidepath(r) Managed and Profunds Ultrashort go up and down completely randomly.

Pair Corralation between Guidepath(r) Managed and Profunds Ultrashort

Assuming the 90 days horizon Guidepath Managed Futures is expected to generate 0.31 times more return on investment than Profunds Ultrashort. However, Guidepath Managed Futures is 3.2 times less risky than Profunds Ultrashort. It trades about -0.12 of its potential returns per unit of risk. Profunds Ultrashort Nasdaq 100 is currently generating about -0.06 per unit of risk. If you would invest  882.00  in Guidepath Managed Futures on September 5, 2024 and sell it today you would lose (95.00) from holding Guidepath Managed Futures or give up 10.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.2%
Values	Daily Returns

Guidepath Managed Futures  vs.  Profunds Ultrashort Nasdaq 100

Guidepath Managed Futures

Risk-Adjusted Performance

0 of 100

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.

Profunds Ultrashort

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Profunds Ultrashort Nasdaq 100 has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Guidepath(r) Managed and Profunds Ultrashort

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

The idea behind Guidepath Managed Futures and Profunds Ultrashort Nasdaq 100 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.