Correlation Between Guggenheim Strategic and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both Guggenheim Strategic and Aberdeen Global 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 Strategic and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Strategic Opportunities and Aberdeen Global Dynamic, you can compare the effects of market volatilities on Guggenheim Strategic and Aberdeen Global 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 Strategic with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and Aberdeen Global.
Diversification Opportunities for Guggenheim Strategic and Aberdeen Global
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guggenheim and Aberdeen is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Aberdeen Global Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Dynamic and Guggenheim Strategic 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 Strategic Opportunities are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global Dynamic has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Aberdeen Global go up and down completely randomly.
Pair Corralation between Guggenheim Strategic and Aberdeen Global
Considering the 90-day investment horizon Guggenheim Strategic is expected to generate 1.12 times less return on investment than Aberdeen Global. In addition to that, Guggenheim Strategic is 1.32 times more volatile than Aberdeen Global Dynamic. It trades about 0.05 of its total potential returns per unit of risk. Aberdeen Global Dynamic is currently generating about 0.07 per unit of volatility. If you would invest 812.00 in Aberdeen Global Dynamic on September 12, 2024 and sell it today you would earn a total of 204.00 from holding Aberdeen Global Dynamic or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Guggenheim Strategic Opportuni vs. Aberdeen Global Dynamic
Performance |
| Timeline |
| Guggenheim Strategic |
| Aberdeen Global Dynamic |
Guggenheim Strategic and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Strategic and Aberdeen Global
The main advantage of trading using opposite Guggenheim Strategic and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Strategic position performs unexpectedly, Aberdeen Global 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 Aberdeen Global will offset losses from the drop in Aberdeen Global's long position.The idea behind Guggenheim Strategic Opportunities and Aberdeen Global Dynamic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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