Correlation Between Intermediate-term and Guidepath Tactical

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

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

Diversification Opportunities for Intermediate-term and Guidepath Tactical

0.84

Correlation Coefficient

Intermediate-term  Guidepath Tactical

Very poor diversification

The 3 months correlation between Intermediate-term and Guidepath is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon and Guidepath Tactical Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Tactical and Intermediate-term 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 Intermediate Term Tax Free Bond are associated (or correlated) with Guidepath Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Tactical has no effect on the direction of Intermediate-term i.e., Intermediate-term and Guidepath Tactical go up and down completely randomly.

Pair Corralation between Intermediate-term and Guidepath Tactical

Assuming the 90 days horizon Intermediate-term is expected to generate 5.66 times less return on investment than Guidepath Tactical. But when comparing it to its historical volatility, Intermediate Term Tax Free Bond is 4.0 times less risky than Guidepath Tactical. It trades about 0.16 of its potential returns per unit of risk. Guidepath Tactical Allocation is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,238  in Guidepath Tactical Allocation on April 22, 2025 and sell it today you would earn a total of  97.00  from holding Guidepath Tactical Allocation or generate 7.84% return on investment over 90 days.

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

Intermediate Term Tax Free Bon  vs.  Guidepath Tactical Allocation

Intermediate Term Tax

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Term Tax Free Bond are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Intermediate-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Intermediate-term and Guidepath Tactical

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

The idea behind Intermediate Term Tax Free Bond and Guidepath Tactical Allocation 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.