Correlation Between Guggenheim Strategic and Sixth Street
Can any of the company-specific risk be diversified away by investing in both Guggenheim Strategic and Sixth Street 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 Sixth Street 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 Sixth Street Specialty, you can compare the effects of market volatilities on Guggenheim Strategic and Sixth Street 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 Sixth Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and Sixth Street.
Diversification Opportunities for Guggenheim Strategic and Sixth Street
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guggenheim and Sixth is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Sixth Street Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sixth Street Specialty 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 Sixth Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sixth Street Specialty has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Sixth Street go up and down completely randomly.
Pair Corralation between Guggenheim Strategic and Sixth Street
Considering the 90-day investment horizon Guggenheim Strategic is expected to generate 1.44 times less return on investment than Sixth Street. But when comparing it to its historical volatility, Guggenheim Strategic Opportunities is 2.23 times less risky than Sixth Street. It trades about 0.14 of its potential returns per unit of risk. Sixth Street Specialty is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,057 in Sixth Street Specialty on August 29, 2024 and sell it today you would earn a total of 37.00 from holding Sixth Street Specialty or generate 1.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Guggenheim Strategic Opportuni vs. Sixth Street Specialty
Performance |
| Timeline |
| Guggenheim Strategic |
| Sixth Street Specialty |
Guggenheim Strategic and Sixth Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Strategic and Sixth Street
The main advantage of trading using opposite Guggenheim Strategic and Sixth Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Strategic position performs unexpectedly, Sixth Street 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 Sixth Street will offset losses from the drop in Sixth Street's long position.| Guggenheim Strategic vs. Eaton Vance National | Guggenheim Strategic vs. Invesco High Income | Guggenheim Strategic vs. Blackrock Muniholdings Ny | Guggenheim Strategic vs. Nuveen California Select |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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