Correlation Between Guggenheim Floating and Guggenheim Total
Can any of the company-specific risk be diversified away by investing in both Guggenheim Floating and Guggenheim Total 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 Floating and Guggenheim Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Floating Rate and Guggenheim Total Return, you can compare the effects of market volatilities on Guggenheim Floating and Guggenheim Total 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 Floating with a short position of Guggenheim Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Floating and Guggenheim Total.
Diversification Opportunities for Guggenheim Floating and Guggenheim Total
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Guggenheim and Guggenheim is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Floating Rate and Guggenheim Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Total Return and Guggenheim Floating 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 Floating Rate are associated (or correlated) with Guggenheim Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Total Return has no effect on the direction of Guggenheim Floating i.e., Guggenheim Floating and Guggenheim Total go up and down completely randomly.
Pair Corralation between Guggenheim Floating and Guggenheim Total
Assuming the 90 days horizon Guggenheim Floating Rate is expected to generate 0.45 times more return on investment than Guggenheim Total. However, Guggenheim Floating Rate is 2.23 times less risky than Guggenheim Total. It trades about 0.21 of its potential returns per unit of risk. Guggenheim Total Return is currently generating about 0.04 per unit of risk. If you would invest 2,026 in Guggenheim Floating Rate on August 25, 2024 and sell it today you would earn a total of 397.00 from holding Guggenheim Floating Rate or generate 19.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Floating Rate vs. Guggenheim Total Return
Performance |
| Timeline |
| Guggenheim Floating Rate |
| Guggenheim Total Return |
Guggenheim Floating and Guggenheim Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Floating and Guggenheim Total
The main advantage of trading using opposite Guggenheim Floating and Guggenheim Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Floating position performs unexpectedly, Guggenheim Total 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 Total will offset losses from the drop in Guggenheim Total's long position.| Guggenheim Floating vs. Guggenheim Total Return | Guggenheim Floating vs. Guggenheim Macro Opportunities | Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Floating Rate |
| Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Guggenheim Total Return | Guggenheim Total vs. Calvert Long Term Income |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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