Correlation Between Midcap Growth and Guidepath Growth

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

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

Diversification Opportunities for Midcap Growth and Guidepath Growth

0.97

Correlation Coefficient

Midcap Growth  Guidepath Growth

Almost no diversification

The 3 months correlation between Midcap and Guidepath is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Midcap Growth Fund and Guidepath Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Growth And and Midcap Growth 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 Midcap Growth Fund are associated (or correlated) with Guidepath Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Growth And has no effect on the direction of Midcap Growth i.e., Midcap Growth and Guidepath Growth go up and down completely randomly.

Pair Corralation between Midcap Growth and Guidepath Growth

Assuming the 90 days horizon Midcap Growth Fund is expected to generate 1.77 times more return on investment than Guidepath Growth. However, Midcap Growth is 1.77 times more volatile than Guidepath Growth And. It trades about 0.31 of its potential returns per unit of risk. Guidepath Growth And is currently generating about 0.21 per unit of risk. If you would invest  915.00  in Midcap Growth Fund on April 28, 2025 and sell it today you would earn a total of  205.00  from holding Midcap Growth Fund or generate 22.4% return on investment over 90 days.

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

Midcap Growth Fund  vs.  Guidepath Growth And

Midcap Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Midcap Growth Fund are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midcap Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Guidepath Growth And

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Growth And are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Guidepath Growth may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Midcap Growth and Guidepath Growth

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

The idea behind Midcap Growth Fund and Guidepath Growth And 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.