Correlation Between Guggenheim Macro and Guggenheim Floating
Can any of the company-specific risk be diversified away by investing in both Guggenheim Macro 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 Macro 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 Macro Opportunities and Guggenheim Floating Rate, you can compare the effects of market volatilities on Guggenheim Macro 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 Macro with a short position of Guggenheim Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Macro and Guggenheim Floating.
Diversification Opportunities for Guggenheim Macro and Guggenheim Floating
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GUGGENHEIM and Guggenheim is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Macro Opportunities 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 Macro 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 Macro Opportunities 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 Macro i.e., Guggenheim Macro and Guggenheim Floating go up and down completely randomly.
Pair Corralation between Guggenheim Macro and Guggenheim Floating
Assuming the 90 days horizon Guggenheim Macro is expected to generate 1.02 times less return on investment than Guggenheim Floating. But when comparing it to its historical volatility, Guggenheim Macro Opportunities is 1.05 times less risky than Guggenheim Floating. It trades about 0.25 of its potential returns per unit of risk. Guggenheim Floating Rate is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 2,408 in Guggenheim Floating Rate on August 29, 2024 and sell it today you would earn a total of 16.00 from holding Guggenheim Floating Rate or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Macro Opportunities vs. Guggenheim Floating Rate
Performance |
| Timeline |
| Guggenheim Macro Opp |
| Guggenheim Floating Rate |
Guggenheim Macro and Guggenheim Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Macro and Guggenheim Floating
The main advantage of trading using opposite Guggenheim Macro and Guggenheim Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Macro 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 Macro vs. Guggenheim Total Return | Guggenheim Macro vs. Guggenheim Floating Rate | Guggenheim Macro vs. Jpmorgan Strategic Income | Guggenheim Macro vs. Guggenheim Macro Opportunities |
| Guggenheim Floating vs. Guggenheim Total Return | Guggenheim Floating vs. Guggenheim Macro Opportunities | Guggenheim Floating vs. Guggenheim Floating Rate | Guggenheim Floating vs. Guggenheim Floating Rate |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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