Correlation Between Csjxx and Guggenheim Risk

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

By analyzing existing cross correlation between Csjxx and Guggenheim Risk Managed, you can compare the effects of market volatilities on Csjxx and Guggenheim Risk 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 Csjxx with a short position of Guggenheim Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Csjxx and Guggenheim Risk.

Diversification Opportunities for Csjxx and Guggenheim Risk

0.28

Correlation Coefficient

Csjxx  Guggenheim Risk

Modest diversification

The 3 months correlation between Csjxx and Guggenheim is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Csjxx and Guggenheim Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Risk Managed and Csjxx 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 Csjxx are associated (or correlated) with Guggenheim Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Risk Managed has no effect on the direction of Csjxx i.e., Csjxx and Guggenheim Risk go up and down completely randomly.

Pair Corralation between Csjxx and Guggenheim Risk

Assuming the 90 days horizon Csjxx is expected to generate 50.96 times more return on investment than Guggenheim Risk. However, Csjxx is 50.96 times more volatile than Guggenheim Risk Managed. It trades about 0.07 of its potential returns per unit of risk. Guggenheim Risk Managed is currently generating about -0.14 per unit of risk. If you would invest  494.00  in Csjxx on September 29, 2024 and sell it today you would lose (394.00) from holding Csjxx or give up 79.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Csjxx  vs.  Guggenheim Risk Managed

Csjxx

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Csjxx are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Csjxx showed solid returns over the last few months and may actually be approaching a breakup point.

Guggenheim Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Csjxx and Guggenheim Risk

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

The idea behind Csjxx and Guggenheim Risk Managed 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..