Correlation Between Davis Financial and Guidepath Multi

Can any of the company-specific risk be diversified away by investing in both Davis Financial and Guidepath Multi 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 Davis Financial and Guidepath Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Davis Financial Fund and Guidepath Multi Asset Income, you can compare the effects of market volatilities on Davis Financial and Guidepath Multi 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 Davis Financial with a short position of Guidepath Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Davis Financial and Guidepath Multi.

Diversification Opportunities for Davis Financial and Guidepath Multi

0.92

Correlation Coefficient

Davis Financial  Guidepath Multi

Almost no diversification

The 3 months correlation between Davis and Guidepath is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Davis Financial Fund and Guidepath Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Multi Asset and Davis Financial 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 Davis Financial Fund are associated (or correlated) with Guidepath Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Multi Asset has no effect on the direction of Davis Financial i.e., Davis Financial and Guidepath Multi go up and down completely randomly.

Pair Corralation between Davis Financial and Guidepath Multi

Assuming the 90 days horizon Davis Financial Fund is expected to generate 2.16 times more return on investment than Guidepath Multi. However, Davis Financial is 2.16 times more volatile than Guidepath Multi Asset Income. It trades about 0.13 of its potential returns per unit of risk. Guidepath Multi Asset Income is currently generating about 0.18 per unit of risk. If you would invest  7,288  in Davis Financial Fund on May 18, 2025 and sell it today you would earn a total of  485.00  from holding Davis Financial Fund or generate 6.65% return on investment over 90 days.

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

Davis Financial Fund  vs.  Guidepath Multi Asset Income

Davis Financial

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Davis Financial Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Davis Financial may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Guidepath Multi Asset

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Multi Asset Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Guidepath Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Davis Financial and Guidepath Multi

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

The idea behind Davis Financial Fund and Guidepath Multi Asset 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.