Correlation Between Guggenheim Strategic and Pioneer Multi

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

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

Diversification Opportunities for Guggenheim Strategic and Pioneer Multi

0.83

Correlation Coefficient

Guggenheim Strategic  Pioneer Multi

Very poor diversification

The 3 months correlation between Guggenheim and Pioneer is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Pioneer Multi Asset Ultrashort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Multi Asset and Guggenheim Strategic 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 Strategic Opportunities are associated (or correlated) with Pioneer Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Multi Asset has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Pioneer Multi go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and Pioneer Multi

Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 6.8 times more return on investment than Pioneer Multi. However, Guggenheim Strategic is 6.8 times more volatile than Pioneer Multi Asset Ultrashort. It trades about 0.04 of its potential returns per unit of risk. Pioneer Multi Asset Ultrashort is currently generating about 0.13 per unit of risk. If you would invest  1,510  in Guggenheim Strategic Opportunities on September 20, 2024 and sell it today you would earn a total of  17.00  from holding Guggenheim Strategic Opportunities or generate 1.13% return on investment over 90 days.

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

Guggenheim Strategic Opportuni  vs.  Pioneer Multi Asset Ultrashort

Guggenheim Strategic

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guggenheim Strategic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pioneer Multi Asset

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Multi Asset Ultrashort are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Pioneer Multi 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 Strategic and Pioneer Multi

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

The idea behind Guggenheim Strategic Opportunities and Pioneer Multi Asset Ultrashort 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.