Correlation Between Guggenheim Floating and Guggenheim Macro
Can any of the company-specific risk be diversified away by investing in both Guggenheim Floating 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 Floating 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 Floating Rate and Guggenheim Macro Opportunities, you can compare the effects of market volatilities on Guggenheim Floating 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 Floating with a short position of Guggenheim Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Floating and Guggenheim Macro.
Diversification Opportunities for Guggenheim Floating and Guggenheim Macro
0.71 | Correlation Coefficient |
Poor diversification
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 Floating Rate 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 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 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 Floating i.e., Guggenheim Floating and Guggenheim Macro go up and down completely randomly.
Pair Corralation between Guggenheim Floating and Guggenheim Macro
Assuming the 90 days horizon Guggenheim Floating is expected to generate 2.06 times less return on investment than Guggenheim Macro. But when comparing it to its historical volatility, Guggenheim Floating Rate is 2.09 times less risky than Guggenheim Macro. It trades about 0.25 of its potential returns per unit of risk. Guggenheim Macro Opportunities is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,469 in Guggenheim Macro Opportunities on September 1, 2024 and sell it today you would earn a total of 11.00 from holding Guggenheim Macro Opportunities or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guggenheim Floating Rate vs. Guggenheim Macro Opportunities
Performance |
| Timeline |
| Guggenheim Floating Rate |
| Guggenheim Macro Opp |
Guggenheim Floating and Guggenheim Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Floating and Guggenheim Macro
The main advantage of trading using opposite Guggenheim Floating and Guggenheim Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Floating 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 Floating vs. The Hartford International | Guggenheim Floating vs. Baird E Plus | Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Limited Duration |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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