Correlation Between Guggenheim Risk and Western Asset
Can any of the company-specific risk be diversified away by investing in both Guggenheim Risk and Western Asset 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 Western Asset 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 Western Asset Total, you can compare the effects of market volatilities on Guggenheim Risk and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Risk and Western Asset.
Diversification Opportunities for Guggenheim Risk and Western Asset
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guggenheim and Western is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Risk Managed and Western Asset Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Total 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Total has no effect on the direction of Guggenheim Risk i.e., Guggenheim Risk and Western Asset go up and down completely randomly.
Pair Corralation between Guggenheim Risk and Western Asset
Assuming the 90 days horizon Guggenheim Risk Managed is expected to generate 3.95 times more return on investment than Western Asset. However, Guggenheim Risk is 3.95 times more volatile than Western Asset Total. It trades about 0.09 of its potential returns per unit of risk. Western Asset Total is currently generating about 0.07 per unit of risk. If you would invest 3,388 in Guggenheim Risk Managed on September 2, 2024 and sell it today you would earn a total of 132.00 from holding Guggenheim Risk Managed or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Risk Managed vs. Western Asset Total
Performance |
| Timeline |
| Guggenheim Risk Managed |
| Western Asset Total |
Guggenheim Risk and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Risk and Western Asset
The main advantage of trading using opposite Guggenheim Risk and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Risk position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Clearbridge Aggressive Growth | Western Asset vs. Clearbridge Small Cap | Western Asset vs. Qs International Equity | Western Asset vs. Clearbridge Appreciation Fund |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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