Correlation Between Guggenheim Market and Paradigm Value
Can any of the company-specific risk be diversified away by investing in both Guggenheim Market and Paradigm Value 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 Market and Paradigm Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Market Neutral and Paradigm Value Fund, you can compare the effects of market volatilities on Guggenheim Market and Paradigm Value 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 Market with a short position of Paradigm Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Market and Paradigm Value.
Diversification Opportunities for Guggenheim Market and Paradigm Value
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guggenheim and Paradigm is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Market Neutral and Paradigm Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paradigm Value and Guggenheim Market 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 Market Neutral are associated (or correlated) with Paradigm Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paradigm Value has no effect on the direction of Guggenheim Market i.e., Guggenheim Market and Paradigm Value go up and down completely randomly.
Pair Corralation between Guggenheim Market and Paradigm Value
Assuming the 90 days horizon Guggenheim Market is expected to generate 13.63 times less return on investment than Paradigm Value. But when comparing it to its historical volatility, Guggenheim Market Neutral is 14.54 times less risky than Paradigm Value. It trades about 0.18 of its potential returns per unit of risk. Paradigm Value Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 6,207 in Paradigm Value Fund on August 29, 2024 and sell it today you would earn a total of 350.00 from holding Paradigm Value Fund or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Market Neutral vs. Paradigm Value Fund
Performance |
| Timeline |
| Guggenheim Market Neutral |
| Paradigm Value |
Guggenheim Market and Paradigm Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Market and Paradigm Value
The main advantage of trading using opposite Guggenheim Market and Paradigm Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Market position performs unexpectedly, Paradigm Value 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 Paradigm Value will offset losses from the drop in Paradigm Value's long position.| Guggenheim Market vs. Guggenheim Market Neutral | Guggenheim Market vs. Guggenheim Market Neutral | Guggenheim Market vs. Guggenheim Market Neutral | Guggenheim Market vs. Locorr Market Trend |
| Paradigm Value vs. Vanguard Small Cap Index | Paradigm Value vs. T Rowe Price | Paradigm Value vs. HUMANA INC | Paradigm Value vs. Aquagold International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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