Correlation Between Guidemark Large and Aew Real
Can any of the company-specific risk be diversified away by investing in both Guidemark Large and Aew Real 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 Aew Real 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 Aew Real Estate, you can compare the effects of market volatilities on Guidemark Large and Aew Real 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 Aew Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Aew Real.
Diversification Opportunities for Guidemark Large and Aew Real
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guidemark and Aew is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Aew Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aew Real Estate 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 Aew Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aew Real Estate has no effect on the direction of Guidemark Large i.e., Guidemark Large and Aew Real go up and down completely randomly.
Pair Corralation between Guidemark Large and Aew Real
Assuming the 90 days horizon Guidemark Large Cap is expected to generate 1.0 times more return on investment than Aew Real. However, Guidemark Large Cap is 1.0 times less risky than Aew Real. It trades about 0.35 of its potential returns per unit of risk. Aew Real Estate is currently generating about 0.09 per unit of risk. If you would invest 1,128 in Guidemark Large Cap on April 23, 2025 and sell it today you would earn a total of 180.00 from holding Guidemark Large Cap or generate 15.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Guidemark Large Cap vs. Aew Real Estate
Performance |
Timeline |
Guidemark Large Cap |
Aew Real Estate |
Guidemark Large and Aew Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Guidemark Large and Aew Real
The main advantage of trading using opposite Guidemark Large and Aew Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large position performs unexpectedly, Aew Real 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 Aew Real will offset losses from the drop in Aew Real's long position.Guidemark Large vs. Multisector Bond Sma | Guidemark Large vs. Gmo High Yield | Guidemark Large vs. Intermediate Term Tax Free Bond | Guidemark Large vs. California Municipal Portfolio |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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