Correlation Between Guggenheim Strategic and Saba Capital
Can any of the company-specific risk be diversified away by investing in both Guggenheim Strategic and Saba Capital 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 Saba Capital 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 Saba Capital Income, you can compare the effects of market volatilities on Guggenheim Strategic and Saba Capital 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 Saba Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and Saba Capital.
Diversification Opportunities for Guggenheim Strategic and Saba Capital
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guggenheim and Saba is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Saba Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saba Capital Income 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 Saba Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saba Capital Income has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Saba Capital go up and down completely randomly.
Pair Corralation between Guggenheim Strategic and Saba Capital
Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 0.9 times more return on investment than Saba Capital. However, Guggenheim Strategic Opportunities is 1.11 times less risky than Saba Capital. It trades about 0.19 of its potential returns per unit of risk. Saba Capital Income is currently generating about 0.17 per unit of risk. If you would invest 1,355 in Guggenheim Strategic Opportunities on September 3, 2024 and sell it today you would earn a total of 225.00 from holding Guggenheim Strategic Opportunities or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Strategic Opportuni vs. Saba Capital Income
Performance |
| Timeline |
| Guggenheim Strategic |
| Saba Capital Income |
Guggenheim Strategic and Saba Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Strategic and Saba Capital
The main advantage of trading using opposite Guggenheim Strategic and Saba Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Strategic position performs unexpectedly, Saba Capital 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 Saba Capital will offset losses from the drop in Saba Capital's long position.The idea behind Guggenheim Strategic Opportunities and Saba Capital Income 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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