Correlation Between Inflation-adjusted and Guidepath(r) Absolute

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

By analyzing existing cross correlation between Inflation Adjusted Bond Fund and Guidepath Absolute Return, you can compare the effects of market volatilities on Inflation-adjusted and Guidepath(r) Absolute 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 Inflation-adjusted with a short position of Guidepath(r) Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflation-adjusted and Guidepath(r) Absolute.

Diversification Opportunities for Inflation-adjusted and Guidepath(r) Absolute

0.88

Correlation Coefficient

Inflation-adjusted  Guidepath(r) Absolute

Very poor diversification

The 3 months correlation between Inflation-adjusted and Guidepath(r) is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Inflation Adjusted Bond Fund and Guidepath Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Absolute Return and Inflation-adjusted 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 Inflation Adjusted Bond Fund are associated (or correlated) with Guidepath(r) Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Absolute Return has no effect on the direction of Inflation-adjusted i.e., Inflation-adjusted and Guidepath(r) Absolute go up and down completely randomly.

Pair Corralation between Inflation-adjusted and Guidepath(r) Absolute

Assuming the 90 days horizon Inflation-adjusted is expected to generate 1.15 times less return on investment than Guidepath(r) Absolute. In addition to that, Inflation-adjusted is 1.21 times more volatile than Guidepath Absolute Return. It trades about 0.17 of its total potential returns per unit of risk. Guidepath Absolute Return is currently generating about 0.23 per unit of volatility. If you would invest  945.00  in Guidepath Absolute Return on May 25, 2025 and sell it today you would earn a total of  24.00  from holding Guidepath Absolute Return or generate 2.54% return on investment over 90 days.

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

Inflation Adjusted Bond Fund  vs.  Guidepath Absolute Return

Inflation Adjusted Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Inflation Adjusted Bond Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Inflation-adjusted is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidepath Absolute Return

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Absolute Return are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guidepath(r) Absolute is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Inflation-adjusted and Guidepath(r) Absolute

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

The idea behind Inflation Adjusted Bond Fund and Guidepath Absolute Return 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.