Correlation Between Aristotle Funds and Guggenheim Risk
Can any of the company-specific risk be diversified away by investing in both Aristotle Funds and Guggenheim Risk 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 Aristotle Funds and Guggenheim Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aristotle Funds Series and Guggenheim Risk Managed, you can compare the effects of market volatilities on Aristotle Funds and Guggenheim Risk 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 Aristotle Funds with a short position of Guggenheim Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aristotle Funds and Guggenheim Risk.
Diversification Opportunities for Aristotle Funds and Guggenheim Risk
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aristotle and Guggenheim is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Aristotle Funds Series and Guggenheim Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Risk Managed and Aristotle Funds 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 Aristotle Funds Series are associated (or correlated) with Guggenheim Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Risk Managed has no effect on the direction of Aristotle Funds i.e., Aristotle Funds and Guggenheim Risk go up and down completely randomly.
Pair Corralation between Aristotle Funds and Guggenheim Risk
Assuming the 90 days horizon Aristotle Funds Series is expected to generate 1.09 times more return on investment than Guggenheim Risk. However, Aristotle Funds is 1.09 times more volatile than Guggenheim Risk Managed. It trades about 0.04 of its potential returns per unit of risk. Guggenheim Risk Managed is currently generating about 0.04 per unit of risk. If you would invest 1,346 in Aristotle Funds Series on August 26, 2024 and sell it today you would earn a total of 288.00 from holding Aristotle Funds Series or generate 21.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aristotle Funds Series vs. Guggenheim Risk Managed
Performance |
| Timeline |
| Aristotle Funds Series |
| Guggenheim Risk Managed |
Aristotle Funds and Guggenheim Risk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aristotle Funds and Guggenheim Risk
The main advantage of trading using opposite Aristotle Funds and Guggenheim Risk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aristotle Funds position performs unexpectedly, Guggenheim Risk 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 Guggenheim Risk will offset losses from the drop in Guggenheim Risk's long position.| Aristotle Funds vs. Franklin Emerging Market | Aristotle Funds vs. Transamerica Emerging Markets | Aristotle Funds vs. Siit Emerging Markets | Aristotle Funds vs. Rbc Bluebay Emerging |
| Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Lazard Global Listed |
Check out your portfolio center.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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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