Correlation Between Guggenheim Total and Performance Trust
Can any of the company-specific risk be diversified away by investing in both Guggenheim Total and Performance Trust 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 Performance Trust 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 Performance Trust Strategic, you can compare the effects of market volatilities on Guggenheim Total and Performance Trust 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 Performance Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Total and Performance Trust.
Diversification Opportunities for Guggenheim Total and Performance Trust
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Guggenheim and Performance is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Total Return and Performance Trust Strategic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust 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 Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust has no effect on the direction of Guggenheim Total i.e., Guggenheim Total and Performance Trust go up and down completely randomly.
Pair Corralation between Guggenheim Total and Performance Trust
Assuming the 90 days horizon Guggenheim Total is expected to generate 1.29 times less return on investment than Performance Trust. In addition to that, Guggenheim Total is 1.13 times more volatile than Performance Trust Strategic. It trades about 0.04 of its total potential returns per unit of risk. Performance Trust Strategic is currently generating about 0.06 per unit of volatility. If you would invest 1,817 in Performance Trust Strategic on September 3, 2024 and sell it today you would earn a total of 184.00 from holding Performance Trust Strategic or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Total Return vs. Performance Trust Strategic
Performance |
| Timeline |
| Guggenheim Total Return |
| Performance Trust |
Guggenheim Total and Performance Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Total and Performance Trust
The main advantage of trading using opposite Guggenheim Total and Performance Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Total position performs unexpectedly, Performance Trust 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 Performance Trust will offset losses from the drop in Performance Trust's long position.| Guggenheim Total vs. Metropolitan West Total | Guggenheim Total vs. Metropolitan West Total | Guggenheim Total vs. Pimco Total Return | Guggenheim Total vs. Total Return Fund |
| Performance Trust vs. Metropolitan West Total | Performance Trust vs. Metropolitan West Total | Performance Trust vs. Pimco Total Return | Performance Trust vs. Total Return Fund |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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