Correlation Between Guggenheim Total and Guggenheim Macro
Can any of the company-specific risk be diversified away by investing in both Guggenheim Total and Guggenheim Macro 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 Macro 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 Macro Opportunities, you can compare the effects of market volatilities on Guggenheim Total and Guggenheim Macro 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 Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Total and Guggenheim Macro.
Diversification Opportunities for Guggenheim Total and Guggenheim Macro
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guggenheim and Guggenheim is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Total Return and Guggenheim Macro Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Macro Opp 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 Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Macro Opp has no effect on the direction of Guggenheim Total i.e., Guggenheim Total and Guggenheim Macro go up and down completely randomly.
Pair Corralation between Guggenheim Total and Guggenheim Macro
Assuming the 90 days horizon Guggenheim Total Return is expected to generate 4.18 times more return on investment than Guggenheim Macro. However, Guggenheim Total is 4.18 times more volatile than Guggenheim Macro Opportunities. It trades about 0.1 of its potential returns per unit of risk. Guggenheim Macro Opportunities is currently generating about 0.25 per unit of risk. If you would invest 2,370 in Guggenheim Total Return on September 1, 2024 and sell it today you would earn a total of 18.00 from holding Guggenheim Total Return or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Total Return vs. Guggenheim Macro Opportunities
Performance |
| Timeline |
| Guggenheim Total Return |
| Guggenheim Macro Opp |
Guggenheim Total and Guggenheim Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Total and Guggenheim Macro
The main advantage of trading using opposite Guggenheim Total and Guggenheim Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Total position performs unexpectedly, Guggenheim Macro 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 Macro will offset losses from the drop in Guggenheim Macro's long position.| Guggenheim Total vs. Performance Trust Strategic | Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Guggenheim Investment Grade |
| Guggenheim Macro vs. Performance Trust Strategic | Guggenheim Macro vs. Guggenheim Total Return | Guggenheim Macro vs. Guggenheim Limited Duration | Guggenheim Macro 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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