Correlation Between Real Estate and Guidepath Absolute

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

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

Diversification Opportunities for Real Estate and Guidepath Absolute

0.51

Correlation Coefficient

Real Estate  Guidepath Absolute

Very weak diversification

The 3 months correlation between Real and Guidepath is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Real Estate Ultrasector 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 Real Estate 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 Real Estate Ultrasector 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 Real Estate i.e., Real Estate and Guidepath Absolute go up and down completely randomly.

Pair Corralation between Real Estate and Guidepath Absolute

Assuming the 90 days horizon Real Estate is expected to generate 1.61 times less return on investment than Guidepath Absolute. In addition to that, Real Estate is 7.46 times more volatile than Guidepath Absolute Return. It trades about 0.02 of its total potential returns per unit of risk. Guidepath Absolute Return is currently generating about 0.21 per unit of volatility. If you would invest  941.00  in Guidepath Absolute Return on May 4, 2025 and sell it today you would earn a total of  23.00  from holding Guidepath Absolute Return or generate 2.44% return on investment over 90 days.

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

Real Estate Ultrasector  vs.  Guidepath Absolute Return

Real Estate Ultrasector

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Real Estate Ultrasector are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Real Estate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidepath Absolute Return

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Absolute Return are ranked lower than 16 (%) 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 Real Estate and Guidepath Absolute

The main advantage of trading using opposite Real Estate and Guidepath Absolute positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Estate 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 Real Estate Ultrasector 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.

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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.