Correlation Between Guggenheim Managed and Schwab Treasury

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

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

Diversification Opportunities for Guggenheim Managed and Schwab Treasury

-0.26

Correlation Coefficient

Guggenheim Managed  Schwab Treasury

Very good diversification

The 3 months correlation between Guggenheim and Schwab is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Schwab Treasury Obligations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Treasury Obli and Guggenheim Managed 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 Managed Futures are associated (or correlated) with Schwab Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Treasury Obli has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Schwab Treasury go up and down completely randomly.

Pair Corralation between Guggenheim Managed and Schwab Treasury

If you would invest  2,069  in Guggenheim Managed Futures on September 12, 2024 and sell it today you would earn a total of  66.00  from holding Guggenheim Managed Futures or generate 3.19% return on investment over 90 days.

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

Guggenheim Managed Futures  vs.  Schwab Treasury Obligations

Guggenheim Managed

Risk-Adjusted Performance

0 of 100

Very Weak

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

Schwab Treasury Obli

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schwab Treasury Obligations are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Schwab Treasury 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 Managed and Schwab Treasury

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

The idea behind Guggenheim Managed Futures and Schwab Treasury Obligations 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.