Correlation Between Guidepath Managed and Aqr Small

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

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

Diversification Opportunities for Guidepath Managed and Aqr Small

0.69

Correlation Coefficient

Guidepath Managed  Aqr Small

Poor diversification

The 3 months correlation between Guidepath and Aqr is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and Aqr Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Small Cap and Guidepath Managed 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 Guidepath Managed Futures are associated (or correlated) with Aqr Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Small Cap has no effect on the direction of Guidepath Managed i.e., Guidepath Managed and Aqr Small go up and down completely randomly.

Pair Corralation between Guidepath Managed and Aqr Small

Assuming the 90 days horizon Guidepath Managed is expected to generate 4.89 times less return on investment than Aqr Small. But when comparing it to its historical volatility, Guidepath Managed Futures is 3.16 times less risky than Aqr Small. It trades about 0.09 of its potential returns per unit of risk. Aqr Small Cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,694  in Aqr Small Cap on May 19, 2025 and sell it today you would earn a total of  169.00  from holding Aqr Small Cap or generate 9.98% return on investment over 90 days.

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

Guidepath Managed Futures  vs.  Aqr Small Cap

Guidepath Managed Futures

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Managed Futures are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Guidepath Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aqr Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Aqr Small Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Aqr Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Guidepath Managed and Aqr Small

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

The idea behind Guidepath Managed Futures and Aqr Small 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.