Correlation Between Absolute Convertible and Guggenheim High
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Guggenheim High 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 Absolute Convertible and Guggenheim High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Guggenheim High Yield, you can compare the effects of market volatilities on Absolute Convertible and Guggenheim High 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 Absolute Convertible with a short position of Guggenheim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Guggenheim High.
Diversification Opportunities for Absolute Convertible and Guggenheim High
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Absolute and Guggenheim is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Guggenheim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim High Yield and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Guggenheim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim High Yield has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Guggenheim High go up and down completely randomly.
Pair Corralation between Absolute Convertible and Guggenheim High
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.38 times more return on investment than Guggenheim High. However, Absolute Convertible Arbitrage is 2.61 times less risky than Guggenheim High. It trades about 0.58 of its potential returns per unit of risk. Guggenheim High Yield is currently generating about 0.14 per unit of risk. If you would invest 1,143 in Absolute Convertible Arbitrage on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Absolute Convertible Arbitrage or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Guggenheim High Yield
Performance |
| Timeline |
| Absolute Convertible |
| Guggenheim High Yield |
Absolute Convertible and Guggenheim High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Guggenheim High
The main advantage of trading using opposite Absolute Convertible and Guggenheim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Guggenheim High 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 High will offset losses from the drop in Guggenheim High's long position.| Absolute Convertible vs. Angel Oak Multi Strategy | Absolute Convertible vs. Transamerica Emerging Markets | Absolute Convertible vs. Black Oak Emerging | Absolute Convertible vs. Barings Emerging Markets |
| Guggenheim High vs. 1919 Financial Services | Guggenheim High vs. Davis Financial Fund | Guggenheim High vs. Fidelity Advisor Financial | Guggenheim High vs. Angel Oak Financial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |