Correlation Between Forum Real and Guidemark(r) Large

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

By analyzing existing cross correlation between Forum Real Estate and Guidemark Large Cap, you can compare the effects of market volatilities on Forum Real and Guidemark(r) Large 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 Forum Real with a short position of Guidemark(r) Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Real and Guidemark(r) Large.

Diversification Opportunities for Forum Real and Guidemark(r) Large

0.94

Correlation Coefficient

Forum Real  Guidemark(r) Large

Almost no diversification

The 3 months correlation between Forum and Guidemark(r) is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Forum Real Estate and Guidemark Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark Large Cap and Forum Real 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 Forum Real Estate are associated (or correlated) with Guidemark(r) Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark Large Cap has no effect on the direction of Forum Real i.e., Forum Real and Guidemark(r) Large go up and down completely randomly.

Pair Corralation between Forum Real and Guidemark(r) Large

Assuming the 90 days horizon Forum Real is expected to generate 4.5 times less return on investment than Guidemark(r) Large. But when comparing it to its historical volatility, Forum Real Estate is 6.5 times less risky than Guidemark(r) Large. It trades about 0.64 of its potential returns per unit of risk. Guidemark Large Cap is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest  3,270  in Guidemark Large Cap on April 21, 2025 and sell it today you would earn a total of  170.00  from holding Guidemark Large Cap or generate 5.2% return on investment over 90 days.

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

Forum Real Estate  vs.  Guidemark Large Cap

Forum Real Estate

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in Forum Real Estate are ranked lower than 69 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Forum Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidemark Large Cap

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Large Cap are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Guidemark(r) Large showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Forum Real and Guidemark(r) Large

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

The idea behind Forum Real Estate and Guidemark Large Cap 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.