Correlation Between Simt Multi and Guidepath(r) Managed

Can any of the company-specific risk be diversified away by investing in both Simt Multi and Guidepath(r) Managed 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 Simt Multi and Guidepath(r) Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Simt Multi Asset Inflation and Guidepath Managed Futures, you can compare the effects of market volatilities on Simt Multi and Guidepath(r) Managed 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 Simt Multi with a short position of Guidepath(r) Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Simt Multi and Guidepath(r) Managed.

Diversification Opportunities for Simt Multi and Guidepath(r) Managed

0.86

Correlation Coefficient

Simt Multi  Guidepath(r) Managed

Very poor diversification

The 3 months correlation between Simt and Guidepath(r) is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Simt Multi Asset Inflation and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures and Simt Multi 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 Simt Multi Asset Inflation are associated (or correlated) with Guidepath(r) Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Simt Multi i.e., Simt Multi and Guidepath(r) Managed go up and down completely randomly.

Pair Corralation between Simt Multi and Guidepath(r) Managed

Assuming the 90 days horizon Simt Multi Asset Inflation is expected to generate 0.35 times more return on investment than Guidepath(r) Managed. However, Simt Multi Asset Inflation is 2.89 times less risky than Guidepath(r) Managed. It trades about -0.06 of its potential returns per unit of risk. Guidepath Managed Futures is currently generating about -0.11 per unit of risk. If you would invest  791.00  in Simt Multi Asset Inflation on March 11, 2024 and sell it today you would lose (3.00) from holding Simt Multi Asset Inflation or give up 0.38% of portfolio value over 90 days.

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

Simt Multi Asset Inflation  vs.  Guidepath Managed Futures

Simt Multi Asset

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Multi Asset Inflation are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Simt Multi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidepath Managed Futures

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Managed Futures are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Guidepath(r) Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Simt Multi and Guidepath(r) Managed

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

The idea behind Simt Multi Asset Inflation and Guidepath Managed Futures 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.