Correlation Between Blackrock Health and Guggenheim Managed

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Can any of the company-specific risk be diversified away by investing in both Blackrock Health and Guggenheim Managed 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 Blackrock Health and Guggenheim Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Health Sciences and Guggenheim Managed Futures, you can compare the effects of market volatilities on Blackrock Health and Guggenheim Managed 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 Blackrock Health with a short position of Guggenheim Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Health and Guggenheim Managed.

Diversification Opportunities for Blackrock Health and Guggenheim Managed

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Blackrock and Guggenheim is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Health Sciences and Guggenheim Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Managed and Blackrock Health 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 Blackrock Health Sciences are associated (or correlated) with Guggenheim Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Managed has no effect on the direction of Blackrock Health i.e., Blackrock Health and Guggenheim Managed go up and down completely randomly.

Pair Corralation between Blackrock Health and Guggenheim Managed

Assuming the 90 days horizon Blackrock Health Sciences is expected to under-perform the Guggenheim Managed. In addition to that, Blackrock Health is 1.19 times more volatile than Guggenheim Managed Futures. It trades about -0.31 of its total potential returns per unit of risk. Guggenheim Managed Futures is currently generating about -0.01 per unit of volatility. If you would invest  2,065  in Guggenheim Managed Futures on September 25, 2024 and sell it today you would lose (6.00) from holding Guggenheim Managed Futures or give up 0.29% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Blackrock Health Sciences  vs.  Guggenheim Managed Futures

 Performance 
       Timeline  
Blackrock Health Sciences 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Blackrock Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
Guggenheim Managed 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.

Blackrock Health and Guggenheim Managed Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Blackrock Health and Guggenheim Managed

The main advantage of trading using opposite Blackrock Health and Guggenheim Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Health position performs unexpectedly, Guggenheim Managed 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 Managed will offset losses from the drop in Guggenheim Managed's long position.
The idea behind Blackrock Health Sciences and Guggenheim Managed Futures 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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