Correlation Between Guidepath Managed and State Street

Can any of the company-specific risk be diversified away by investing in both Guidepath Managed and State Street 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 State Street 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 State Street Equity, you can compare the effects of market volatilities on Guidepath Managed and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath Managed and State Street.

Diversification Opportunities for Guidepath Managed and State Street

-0.11

Correlation Coefficient

Guidepath Managed  State Street

Good diversification

The 3 months correlation between Guidepath and State is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures and State Street Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Equity 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Equity has no effect on the direction of Guidepath Managed i.e., Guidepath Managed and State Street go up and down completely randomly.

Pair Corralation between Guidepath Managed and State Street

Assuming the 90 days horizon Guidepath Managed Futures is expected to under-perform the State Street. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guidepath Managed Futures is 1.69 times less risky than State Street. The mutual fund trades about 0.0 of its potential returns per unit of risk. The State Street Equity is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  41,297  in State Street Equity on April 28, 2025 and sell it today you would earn a total of  6,497  from holding State Street Equity or generate 15.73% return on investment over 90 days.

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

Guidepath Managed Futures  vs.  State Street Equity

Guidepath Managed Futures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guidepath Managed Futures has generated negative risk-adjusted returns adding no value to fund investors. 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.

State Street Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in State Street Equity are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, State Street showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guidepath Managed and State Street

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

The idea behind Guidepath Managed Futures and State Street Equity 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.