Correlation Between Guggenheim Active and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Guggenheim Active and Dow Jones 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 Active and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Active Allocation and Dow Jones Industrial, you can compare the effects of market volatilities on Guggenheim Active and Dow Jones 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 Active with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Active and Dow Jones.
Diversification Opportunities for Guggenheim Active and Dow Jones
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guggenheim and Dow is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Active Allocation and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Guggenheim Active 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 Active Allocation are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Guggenheim Active i.e., Guggenheim Active and Dow Jones go up and down completely randomly.
Pair Corralation between Guggenheim Active and Dow Jones
Considering the 90-day investment horizon Guggenheim Active Allocation is expected to under-perform the Dow Jones. But the stock apears to be less risky and, when comparing its historical volatility, Guggenheim Active Allocation is 1.15 times less risky than Dow Jones. The stock trades about -0.08 of its potential returns per unit of risk. The Dow Jones Industrial is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,201,159 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 289,906 from holding Dow Jones Industrial or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Active Allocation vs. Dow Jones Industrial
Performance |
| Timeline |
Guggenheim Active and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Guggenheim Active Allocation
Pair trading matchups for Guggenheim Active
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Guggenheim Active and Dow Jones
The main advantage of trading using opposite Guggenheim Active and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Active position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Guggenheim Active vs. Cohen Steers Real | Guggenheim Active vs. RiverNorth Flexible Municipalome | Guggenheim Active vs. Western Asset Diversified | Guggenheim Active vs. Cohen Steers Tax Advantaged |
| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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