Correlation Between Guggenheim Risk and Dana Large

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

Diversification Opportunities for Guggenheim Risk and Dana Large

0.01

Correlation Coefficient

Guggenheim Risk  Dana Large

Significant diversification

The 3 months correlation between Guggenheim and Dana is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Risk Managed and Dana Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Large Cap 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 Dana Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Large Cap has no effect on the direction of Guggenheim Risk i.e., Guggenheim Risk and Dana Large go up and down completely randomly.

Pair Corralation between Guggenheim Risk and Dana Large

Assuming the 90 days horizon Guggenheim Risk Managed is expected to under-perform the Dana Large. In addition to that, Guggenheim Risk is 1.2 times more volatile than Dana Large Cap. It trades about -0.08 of its total potential returns per unit of risk. Dana Large Cap is currently generating about 0.25 per unit of volatility. If you would invest  2,651  in Dana Large Cap on September 18, 2024 and sell it today you would earn a total of  66.00  from holding Dana Large Cap or generate 2.49% return on investment over 90 days.

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

Guggenheim Risk Managed  vs.  Dana Large Cap

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.

Dana Large Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Large Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Dana Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guggenheim Risk and Dana Large

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

The idea behind Guggenheim Risk Managed and Dana Large Cap 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 Anywhere module to track or share privately all of your investments from the convenience of any device.