Correlation Between Guggenheim Risk and CARPENTER

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

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

Diversification Opportunities for Guggenheim Risk and CARPENTER

-0.12

Correlation Coefficient

Guggenheim Risk  CARPENTER

Good diversification

The 3 months correlation between Guggenheim and CARPENTER is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Risk Managed and CARPENTER TECHNOLOGY P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CARPENTER TECHNOLOGY and Guggenheim Risk 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 Risk Managed are associated (or correlated) with CARPENTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CARPENTER TECHNOLOGY has no effect on the direction of Guggenheim Risk i.e., Guggenheim Risk and CARPENTER go up and down completely randomly.

Pair Corralation between Guggenheim Risk and CARPENTER

Assuming the 90 days horizon Guggenheim Risk Managed is expected to under-perform the CARPENTER. In addition to that, Guggenheim Risk is 1.52 times more volatile than CARPENTER TECHNOLOGY P. It trades about -0.05 of its total potential returns per unit of risk. CARPENTER TECHNOLOGY P is currently generating about 0.03 per unit of volatility. If you would invest  9,944  in CARPENTER TECHNOLOGY P on September 13, 2024 and sell it today you would earn a total of  66.00  from holding CARPENTER TECHNOLOGY P or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Guggenheim Risk Managed  vs.  CARPENTER TECHNOLOGY P

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 fairly strong basic indicators, Guggenheim Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

CARPENTER TECHNOLOGY

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CARPENTER TECHNOLOGY P are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CARPENTER is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guggenheim Risk and CARPENTER

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

The idea behind Guggenheim Risk Managed and CARPENTER TECHNOLOGY P 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.