Correlation Between Guggenheim Risk and Capital World
Can any of the company-specific risk be diversified away by investing in both Guggenheim Risk and Capital World 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 Risk and Capital World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Risk Managed and Capital World Bond, you can compare the effects of market volatilities on Guggenheim Risk and Capital World 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 Risk with a short position of Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Risk and Capital World.
Diversification Opportunities for Guggenheim Risk and Capital World
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guggenheim and Capital is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Risk Managed and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond and Guggenheim Risk 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 Risk Managed are associated (or correlated) with Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Guggenheim Risk i.e., Guggenheim Risk and Capital World go up and down completely randomly.
Pair Corralation between Guggenheim Risk and Capital World
Assuming the 90 days horizon Guggenheim Risk Managed is expected to generate 2.15 times more return on investment than Capital World. However, Guggenheim Risk is 2.15 times more volatile than Capital World Bond. It trades about -0.03 of its potential returns per unit of risk. Capital World Bond is currently generating about -0.15 per unit of risk. If you would invest 3,455 in Guggenheim Risk Managed on September 12, 2024 and sell it today you would lose (59.00) from holding Guggenheim Risk Managed or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Risk Managed vs. Capital World Bond
Performance |
| Timeline |
| Guggenheim Risk Managed |
| Capital World Bond |
Guggenheim Risk and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Risk and Capital World
The main advantage of trading using opposite Guggenheim Risk and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Risk position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Guggenheim Risk Managed | Guggenheim Risk vs. Lazard Global Listed |
| Capital World vs. Gmo Global Equity | Capital World vs. Balanced Fund Retail | Capital World vs. Ms Global Fixed | Capital World vs. Ab Select Equity |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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