Correlation Between Guidepath(r) Conservative and Guidemark(r) Small/mid

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

By analyzing existing cross correlation between Guidepath Servative Allocation and Guidemark Smallmid Cap, you can compare the effects of market volatilities on Guidepath(r) Conservative and Guidemark(r) Small/mid 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(r) Conservative with a short position of Guidemark(r) Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath(r) Conservative and Guidemark(r) Small/mid.

Diversification Opportunities for Guidepath(r) Conservative and Guidemark(r) Small/mid

0.93

Correlation Coefficient

Guidepath(r) Conservative  Guidemark(r) Small/mid

Almost no diversification

The 3 months correlation between Guidepath(r) and Guidemark(r) is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Servative Allocation and Guidemark Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Smallmid Cap and Guidepath(r) Conservative 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 Servative Allocation are associated (or correlated) with Guidemark(r) Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Smallmid Cap has no effect on the direction of Guidepath(r) Conservative i.e., Guidepath(r) Conservative and Guidemark(r) Small/mid go up and down completely randomly.

Pair Corralation between Guidepath(r) Conservative and Guidemark(r) Small/mid

Assuming the 90 days horizon Guidepath(r) Conservative is expected to generate 1.03 times less return on investment than Guidemark(r) Small/mid. But when comparing it to its historical volatility, Guidepath Servative Allocation is 2.94 times less risky than Guidemark(r) Small/mid. It trades about 0.22 of its potential returns per unit of risk. Guidemark Smallmid Cap is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,896  in Guidemark Smallmid Cap on May 11, 2025 and sell it today you would earn a total of  83.00  from holding Guidemark Smallmid Cap or generate 4.38% return on investment over 90 days.

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

Guidepath Servative Allocation  vs.  Guidemark Smallmid Cap

Guidepath(r) Conservative

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Servative Allocation are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Guidepath(r) Conservative is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidemark Smallmid Cap

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Smallmid Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Guidemark(r) Small/mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guidepath(r) Conservative and Guidemark(r) Small/mid

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

The idea behind Guidepath Servative Allocation and Guidemark Smallmid 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.