Correlation Between Guggenheim Strategic and Blackrock Enhanced
Can any of the company-specific risk be diversified away by investing in both Guggenheim Strategic and Blackrock Enhanced 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 Blackrock Enhanced 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 Blackrock Enhanced Equity, you can compare the effects of market volatilities on Guggenheim Strategic and Blackrock Enhanced 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 Blackrock Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and Blackrock Enhanced.
Diversification Opportunities for Guggenheim Strategic and Blackrock Enhanced
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guggenheim and Blackrock is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Blackrock Enhanced Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Enhanced Equity 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 Blackrock Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Enhanced Equity has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Blackrock Enhanced go up and down completely randomly.
Pair Corralation between Guggenheim Strategic and Blackrock Enhanced
Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 0.71 times more return on investment than Blackrock Enhanced. However, Guggenheim Strategic Opportunities is 1.4 times less risky than Blackrock Enhanced. It trades about 0.18 of its potential returns per unit of risk. Blackrock Enhanced Equity is currently generating about 0.12 per unit of risk. If you would invest 1,383 in Guggenheim Strategic Opportunities on September 13, 2024 and sell it today you would earn a total of 192.00 from holding Guggenheim Strategic Opportunities or generate 13.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.2% |
| Values | Daily Returns |
Guggenheim Strategic Opportuni vs. Blackrock Enhanced Equity
Performance |
| Timeline |
| Guggenheim Strategic |
| Blackrock Enhanced Equity |
Guggenheim Strategic and Blackrock Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Strategic and Blackrock Enhanced
The main advantage of trading using opposite Guggenheim Strategic and Blackrock Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Strategic position performs unexpectedly, Blackrock Enhanced 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 Blackrock Enhanced will offset losses from the drop in Blackrock Enhanced's long position.The idea behind Guggenheim Strategic Opportunities and Blackrock Enhanced Equity 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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