Correlation Between Guggenheim Strategic and Eagle Pointome
Can any of the company-specific risk be diversified away by investing in both Guggenheim Strategic and Eagle Pointome 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 Eagle Pointome 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 Eagle Pointome, you can compare the effects of market volatilities on Guggenheim Strategic and Eagle Pointome 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 Eagle Pointome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and Eagle Pointome.
Diversification Opportunities for Guggenheim Strategic and Eagle Pointome
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guggenheim and Eagle is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Eagle Pointome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Pointome 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 Eagle Pointome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Pointome has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Eagle Pointome go up and down completely randomly.
Pair Corralation between Guggenheim Strategic and Eagle Pointome
Considering the 90-day investment horizon Guggenheim Strategic is expected to generate 1.3 times less return on investment than Eagle Pointome. In addition to that, Guggenheim Strategic is 1.08 times more volatile than Eagle Pointome. It trades about 0.05 of its total potential returns per unit of risk. Eagle Pointome is currently generating about 0.07 per unit of volatility. If you would invest 1,112 in Eagle Pointome on August 28, 2024 and sell it today you would earn a total of 461.00 from holding Eagle Pointome or generate 41.46% 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. Eagle Pointome
Performance |
| Timeline |
| Guggenheim Strategic |
| Eagle Pointome |
Guggenheim Strategic and Eagle Pointome Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Strategic and Eagle Pointome
The main advantage of trading using opposite Guggenheim Strategic and Eagle Pointome positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Strategic position performs unexpectedly, Eagle Pointome 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 Eagle Pointome will offset losses from the drop in Eagle Pointome's long position.The idea behind Guggenheim Strategic Opportunities and Eagle Pointome 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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