Correlation Between Guidemark Large and International Investors
Can any of the company-specific risk be diversified away by investing in both Guidemark Large and International Investors 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 Guidemark Large and International Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Large Cap and International Investors Gold, you can compare the effects of market volatilities on Guidemark Large and International Investors 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 Guidemark Large with a short position of International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and International Investors.
Diversification Opportunities for Guidemark Large and International Investors
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guidemark and International is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors and Guidemark Large 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 Guidemark Large Cap are associated (or correlated) with International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Guidemark Large i.e., Guidemark Large and International Investors go up and down completely randomly.
Pair Corralation between Guidemark Large and International Investors
Assuming the 90 days horizon Guidemark Large is expected to generate 2.03 times less return on investment than International Investors. But when comparing it to its historical volatility, Guidemark Large Cap is 2.4 times less risky than International Investors. It trades about 0.21 of its potential returns per unit of risk. International Investors Gold is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,256 in International Investors Gold on May 29, 2025 and sell it today you would earn a total of 257.00 from holding International Investors Gold or generate 20.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidemark Large Cap vs. International Investors Gold
Performance |
| Timeline |
| Guidemark Large Cap |
| International Investors |
Guidemark Large and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark Large and International Investors
The main advantage of trading using opposite Guidemark Large and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Guidemark Large vs. Guidemark E Fixed | Guidemark Large vs. Guidemark Large Cap | Guidemark Large vs. Guidemark Smallmid Cap | Guidemark Large vs. Guidemark World Ex Us |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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