Correlation Between Guggenheim Limited and Guggenheim Macro

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

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

Diversification Opportunities for Guggenheim Limited and Guggenheim Macro

0.47

Correlation Coefficient

Guggenheim Limited  Guggenheim Macro

Very weak diversification

The 3 months correlation between Guggenheim and Guggenheim is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Limited Duration and Guggenheim Macro Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Macro Opp and Guggenheim Limited 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 Guggenheim Limited Duration are associated (or correlated) with Guggenheim Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Macro Opp has no effect on the direction of Guggenheim Limited i.e., Guggenheim Limited and Guggenheim Macro go up and down completely randomly.

Pair Corralation between Guggenheim Limited and Guggenheim Macro

Assuming the 90 days horizon Guggenheim Limited Duration is not expected to generate positive returns. However, Guggenheim Limited Duration is 1.05 times less risky than Guggenheim Macro. It waists most of its returns potential to compensate for thr risk taken. Guggenheim Macro is generating about 0.1 per unit of risk. If you would invest  2,467  in Guggenheim Macro Opportunities on September 14, 2024 and sell it today you would earn a total of  17.00  from holding Guggenheim Macro Opportunities or generate 0.69% return on investment over 90 days.

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

Guggenheim Limited Duration  vs.  Guggenheim Macro Opportunities

Guggenheim Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Guggenheim Macro Opp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Macro Opportunities are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Guggenheim Macro is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guggenheim Limited and Guggenheim Macro

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

The idea behind Guggenheim Limited Duration and Guggenheim Macro Opportunities 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.