Correlation Between American Funds and Guggenheim Managed
Can any of the company-specific risk be diversified away by investing in both American Funds 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 American Funds and Guggenheim Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Inflation and Guggenheim Managed Futures, you can compare the effects of market volatilities on American Funds 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 American Funds with a short position of Guggenheim Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Guggenheim Managed.
Diversification Opportunities for American Funds and Guggenheim Managed
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Guggenheim is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Inflation and Guggenheim Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Managed and American 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 American Funds Inflation 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 American Funds i.e., American Funds and Guggenheim Managed go up and down completely randomly.
Pair Corralation between American Funds and Guggenheim Managed
Assuming the 90 days horizon American Funds Inflation is expected to generate 0.49 times more return on investment than Guggenheim Managed. However, American Funds Inflation is 2.05 times less risky than Guggenheim Managed. It trades about 0.04 of its potential returns per unit of risk. Guggenheim Managed Futures is currently generating about 0.0 per unit of risk. If you would invest 898.00 in American Funds Inflation on September 12, 2024 and sell it today you would earn a total of 46.00 from holding American Funds Inflation or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Inflation vs. Guggenheim Managed Futures
Performance |
| Timeline |
| American Funds Inflation |
| Guggenheim Managed |
American Funds and Guggenheim Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Guggenheim Managed
The main advantage of trading using opposite American Funds and Guggenheim Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds 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.| American Funds vs. Vanguard Inflation Protected Securities | American Funds vs. Vanguard Inflation Protected Securities | American Funds vs. American Funds Inflation |
| Guggenheim Managed vs. Pimco Trends Managed | Guggenheim Managed vs. Pimco Trends Managed | Guggenheim Managed vs. SCOR PK | Guggenheim Managed vs. Morningstar Unconstrained Allocation |
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 Stocks Directory module to find actively traded stocks across global markets.
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