Correlation Between Guidemark Large and Semiconductor Ultrasector

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

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

Diversification Opportunities for Guidemark Large and Semiconductor Ultrasector

0.81

Correlation Coefficient

Guidemark Large  Semiconductor Ultrasector

Very poor diversification

The 3 months correlation between Guidemark and Semiconductor is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Semiconductor Ultrasector Prof in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Semiconductor Ultrasector and Guidemark Large 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 Guidemark Large Cap are associated (or correlated) with Semiconductor Ultrasector. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Semiconductor Ultrasector has no effect on the direction of Guidemark Large i.e., Guidemark Large and Semiconductor Ultrasector go up and down completely randomly.

Pair Corralation between Guidemark Large and Semiconductor Ultrasector

Assuming the 90 days horizon Guidemark Large is expected to generate 2.8 times less return on investment than Semiconductor Ultrasector. But when comparing it to its historical volatility, Guidemark Large Cap is 3.58 times less risky than Semiconductor Ultrasector. It trades about 0.19 of its potential returns per unit of risk. Semiconductor Ultrasector Profund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,743  in Semiconductor Ultrasector Profund on June 28, 2025 and sell it today you would earn a total of  974.00  from holding Semiconductor Ultrasector Profund or generate 20.54% return on investment over 90 days.

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

Guidemark Large Cap  vs.  Semiconductor Ultrasector Prof

Guidemark Large Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Large Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guidemark Large may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Semiconductor Ultrasector

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Semiconductor Ultrasector Profund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Semiconductor Ultrasector showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guidemark Large and Semiconductor Ultrasector

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

The idea behind Guidemark Large Cap and Semiconductor Ultrasector Profund 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..