Correlation Between Calvert Long and Guggenheim Total

Can any of the company-specific risk be diversified away by investing in both Calvert Long and Guggenheim Total 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 Calvert Long and Guggenheim Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Calvert Long Term Income and Guggenheim Total Return, you can compare the effects of market volatilities on Calvert Long and Guggenheim Total 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 Calvert Long with a short position of Guggenheim Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert Long and Guggenheim Total.

Diversification Opportunities for Calvert Long and Guggenheim Total

0.96

Correlation Coefficient

Calvert Long  Guggenheim Total

Almost no diversification

The 3 months correlation between Calvert and Guggenheim is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Calvert Long Term Income and Guggenheim Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Total Return and Calvert Long 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 Calvert Long Term Income are associated (or correlated) with Guggenheim Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Total Return has no effect on the direction of Calvert Long i.e., Calvert Long and Guggenheim Total go up and down completely randomly.

Pair Corralation between Calvert Long and Guggenheim Total

Assuming the 90 days horizon Calvert Long Term Income is expected to under-perform the Guggenheim Total. In addition to that, Calvert Long is 1.03 times more volatile than Guggenheim Total Return. It trades about -0.15 of its total potential returns per unit of risk. Guggenheim Total Return is currently generating about -0.12 per unit of volatility. If you would invest  2,421  in Guggenheim Total Return on September 20, 2024 and sell it today you would lose (52.00) from holding Guggenheim Total Return or give up 2.15% of portfolio value over 90 days.

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

Calvert Long Term Income  vs.  Guggenheim Total Return

Calvert Long Term

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Long Term Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Calvert Long is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guggenheim Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Total Return has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Guggenheim Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Calvert Long and Guggenheim Total

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

The idea behind Calvert Long Term Income and Guggenheim Total Return 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.