Correlation Between Guggenheim Strategic and Pioneer Select

Can any of the company-specific risk be diversified away by investing in both Guggenheim Strategic and Pioneer Select 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 Select 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 Select Mid, you can compare the effects of market volatilities on Guggenheim Strategic and Pioneer Select 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 Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and Pioneer Select.

Diversification Opportunities for Guggenheim Strategic and Pioneer Select

0.67

Correlation Coefficient

Guggenheim Strategic  Pioneer Select

Poor diversification

The 3 months correlation between Guggenheim and Pioneer is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Pioneer Select Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Select Mid 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 Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Select Mid has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Pioneer Select go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and Pioneer Select

Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 0.32 times more return on investment than Pioneer Select. However, Guggenheim Strategic Opportunities is 3.08 times less risky than Pioneer Select. It trades about 0.0 of its potential returns per unit of risk. Pioneer Select Mid is currently generating about -0.03 per unit of risk. If you would invest  1,511  in Guggenheim Strategic Opportunities on September 21, 2024 and sell it today you would lose (3.00) from holding Guggenheim Strategic Opportunities or give up 0.2% of portfolio value over 90 days.

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

Guggenheim Strategic Opportuni  vs.  Pioneer Select Mid

Guggenheim Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Strategic Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. 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 Select Mid

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pioneer Select Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Pioneer Select 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 Select

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

The idea behind Guggenheim Strategic Opportunities and Pioneer Select Mid 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.