Correlation Between World Energy and Guidepath(r) Flexible

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

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

Diversification Opportunities for World Energy and Guidepath(r) Flexible

0.47

Correlation Coefficient

World Energy  Guidepath(r) Flexible

Very weak diversification

The 3 months correlation between World and Guidepath(r) is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Guidepath Flexible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Flexible Income and World Energy 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 World Energy Fund are associated (or correlated) with Guidepath(r) Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Flexible Income has no effect on the direction of World Energy i.e., World Energy and Guidepath(r) Flexible go up and down completely randomly.

Pair Corralation between World Energy and Guidepath(r) Flexible

Assuming the 90 days horizon World Energy Fund is expected to generate 9.53 times more return on investment than Guidepath(r) Flexible. However, World Energy is 9.53 times more volatile than Guidepath Flexible Income. It trades about 0.22 of its potential returns per unit of risk. Guidepath Flexible Income is currently generating about 0.34 per unit of risk. If you would invest  1,433  in World Energy Fund on May 8, 2025 and sell it today you would earn a total of  222.00  from holding World Energy Fund or generate 15.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

World Energy Fund  vs.  Guidepath Flexible Income

World Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in World Energy Fund are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, World Energy showed solid returns over the last few months and may actually be approaching a breakup point.

Guidepath Flexible Income

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Flexible Income are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Guidepath(r) Flexible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with World Energy and Guidepath(r) Flexible

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

The idea behind World Energy Fund and Guidepath Flexible Income 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.