Correlation Between Guidepath Tactical and Guidepath Absolute

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

By analyzing existing cross correlation between Guidepath Tactical Allocation and Guidepath Absolute Return, you can compare the effects of market volatilities on Guidepath Tactical and Guidepath Absolute 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 Tactical with a short position of Guidepath Absolute. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath Tactical and Guidepath Absolute.

Diversification Opportunities for Guidepath Tactical and Guidepath Absolute

0.88

Correlation Coefficient

Guidepath Tactical  Guidepath Absolute

Very poor diversification

The 3 months correlation between Guidepath and Guidepath is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Tactical Allocation and Guidepath Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Absolute Return and Guidepath Tactical 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 Tactical Allocation are associated (or correlated) with Guidepath Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Absolute Return has no effect on the direction of Guidepath Tactical i.e., Guidepath Tactical and Guidepath Absolute go up and down completely randomly.

Pair Corralation between Guidepath Tactical and Guidepath Absolute

Assuming the 90 days horizon Guidepath Tactical Allocation is expected to generate 3.19 times more return on investment than Guidepath Absolute. However, Guidepath Tactical is 3.19 times more volatile than Guidepath Absolute Return. It trades about 0.22 of its potential returns per unit of risk. Guidepath Absolute Return is currently generating about 0.15 per unit of risk. If you would invest  1,256  in Guidepath Tactical Allocation on April 27, 2025 and sell it today you would earn a total of  102.00  from holding Guidepath Tactical Allocation or generate 8.12% return on investment over 90 days.

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

Guidepath Tactical Allocation  vs.  Guidepath Absolute Return

Guidepath Tactical

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Tactical Allocation are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guidepath Tactical may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Guidepath Absolute Return

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Absolute Return are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guidepath Absolute 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 Tactical and Guidepath Absolute

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

The idea behind Guidepath Tactical Allocation and Guidepath Absolute Return 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.

Check out your portfolio center.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.