Correlation Between Vy Jpmorgan and Guidemark Smallmid

Can any of the company-specific risk be diversified away by investing in both Vy Jpmorgan and Guidemark Smallmid 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 Vy Jpmorgan and Guidemark Smallmid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vy Jpmorgan Small and Guidemark Smallmid Cap, you can compare the effects of market volatilities on Vy Jpmorgan and Guidemark Smallmid 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 Vy Jpmorgan with a short position of Guidemark Smallmid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vy Jpmorgan and Guidemark Smallmid.

Diversification Opportunities for Vy Jpmorgan and Guidemark Smallmid

0.99

Correlation Coefficient

Vy Jpmorgan  Guidemark Smallmid

No risk reduction

The 3 months correlation between IJSIX and Guidemark is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vy Jpmorgan Small and Guidemark Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Smallmid Cap and Vy Jpmorgan 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 Vy Jpmorgan Small are associated (or correlated) with Guidemark Smallmid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Smallmid Cap has no effect on the direction of Vy Jpmorgan i.e., Vy Jpmorgan and Guidemark Smallmid go up and down completely randomly.

Pair Corralation between Vy Jpmorgan and Guidemark Smallmid

Assuming the 90 days horizon Vy Jpmorgan is expected to generate 2.33 times less return on investment than Guidemark Smallmid. In addition to that, Vy Jpmorgan is 1.05 times more volatile than Guidemark Smallmid Cap. It trades about 0.02 of its total potential returns per unit of risk. Guidemark Smallmid Cap is currently generating about 0.04 per unit of volatility. If you would invest  2,103  in Guidemark Smallmid Cap on September 27, 2024 and sell it today you would earn a total of  53.00  from holding Guidemark Smallmid Cap or generate 2.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Vy Jpmorgan Small  vs.  Guidemark Smallmid Cap

Vy Jpmorgan Small

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vy Jpmorgan Small are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Vy Jpmorgan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidemark Smallmid Cap

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Smallmid Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Guidemark Smallmid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vy Jpmorgan and Guidemark Smallmid

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

The idea behind Vy Jpmorgan Small and Guidemark Smallmid Cap 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.