Correlation Between Guggenheim Macro and Brandes Emerging
Can any of the company-specific risk be diversified away by investing in both Guggenheim Macro and Brandes Emerging 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 Brandes Emerging 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 Brandes Emerging Markets, you can compare the effects of market volatilities on Guggenheim Macro and Brandes Emerging 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 Brandes Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Macro and Brandes Emerging.
Diversification Opportunities for Guggenheim Macro and Brandes Emerging
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guggenheim and Brandes is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Macro Opportunities and Brandes Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes Emerging Markets 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 Brandes Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes Emerging Markets has no effect on the direction of Guggenheim Macro i.e., Guggenheim Macro and Brandes Emerging go up and down completely randomly.
Pair Corralation between Guggenheim Macro and Brandes Emerging
Assuming the 90 days horizon Guggenheim Macro Opportunities is expected to generate 0.14 times more return on investment than Brandes Emerging. However, Guggenheim Macro Opportunities is 7.02 times less risky than Brandes Emerging. It trades about 0.18 of its potential returns per unit of risk. Brandes Emerging Markets is currently generating about -0.25 per unit of risk. If you would invest 2,463 in Guggenheim Macro Opportunities on August 26, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Macro Opportunities vs. Brandes Emerging Markets
Performance |
| Timeline |
| Guggenheim Macro Opp |
| Brandes Emerging Markets |
Guggenheim Macro and Brandes Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Macro and Brandes Emerging
The main advantage of trading using opposite Guggenheim Macro and Brandes Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Macro position performs unexpectedly, Brandes Emerging 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 Brandes Emerging will offset losses from the drop in Brandes Emerging's long position.| Guggenheim Macro vs. Guggenheim Total Return | Guggenheim Macro vs. Guggenheim Floating Rate | Guggenheim Macro vs. Guggenheim Limited Duration | Guggenheim Macro vs. Pimco Incme Fund |
| Brandes Emerging vs. Baron Emerging Markets | Brandes Emerging vs. Brandes International Equity | Brandes Emerging vs. Guggenheim Macro Opportunities | Brandes Emerging vs. Aqr Diversified Arbitrage |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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