Correlation Between Guggenheim Total and Guggenheim Floating
Can any of the company-specific risk be diversified away by investing in both Guggenheim Total and Guggenheim Floating 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 Total and Guggenheim Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Total Return and Guggenheim Floating Rate, you can compare the effects of market volatilities on Guggenheim Total and Guggenheim Floating 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 Total with a short position of Guggenheim Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Total and Guggenheim Floating.
Diversification Opportunities for Guggenheim Total and Guggenheim Floating
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GUGGENHEIM and Guggenheim is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Total Return and Guggenheim Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Floating Rate and Guggenheim Total 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 Total Return are associated (or correlated) with Guggenheim Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Floating Rate has no effect on the direction of Guggenheim Total i.e., Guggenheim Total and Guggenheim Floating go up and down completely randomly.
Pair Corralation between Guggenheim Total and Guggenheim Floating
Assuming the 90 days horizon Guggenheim Total is expected to generate 1.89 times less return on investment than Guggenheim Floating. In addition to that, Guggenheim Total is 2.42 times more volatile than Guggenheim Floating Rate. It trades about 0.05 of its total potential returns per unit of risk. Guggenheim Floating Rate is currently generating about 0.21 per unit of volatility. If you would invest 2,054 in Guggenheim Floating Rate on August 29, 2024 and sell it today you would earn a total of 369.00 from holding Guggenheim Floating Rate or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Total Return vs. Guggenheim Floating Rate
Performance |
| Timeline |
| Guggenheim Total Return |
| Guggenheim Floating Rate |
Guggenheim Total and Guggenheim Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Total and Guggenheim Floating
The main advantage of trading using opposite Guggenheim Total and Guggenheim Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Total position performs unexpectedly, Guggenheim Floating 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 Floating will offset losses from the drop in Guggenheim Floating's long position.| Guggenheim Total vs. Guggenheim Macro Opportunities | Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Guggenheim Total Return |
| Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Macro Opportunities |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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