Correlation Between Global Technology and Guggenheim Managed
Can any of the company-specific risk be diversified away by investing in both Global Technology and Guggenheim Managed 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 Global Technology and Guggenheim Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Technology Portfolio and Guggenheim Managed Futures, you can compare the effects of market volatilities on Global Technology and Guggenheim Managed 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 Global Technology with a short position of Guggenheim Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Technology and Guggenheim Managed.
Diversification Opportunities for Global Technology and Guggenheim Managed
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Global and Guggenheim is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Global Technology Portfolio and Guggenheim Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Managed and Global Technology 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 Global Technology Portfolio are associated (or correlated) with Guggenheim Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Managed has no effect on the direction of Global Technology i.e., Global Technology and Guggenheim Managed go up and down completely randomly.
Pair Corralation between Global Technology and Guggenheim Managed
Assuming the 90 days horizon Global Technology Portfolio is expected to under-perform the Guggenheim Managed. In addition to that, Global Technology is 2.31 times more volatile than Guggenheim Managed Futures. It trades about -0.03 of its total potential returns per unit of risk. Guggenheim Managed Futures is currently generating about -0.04 per unit of volatility. If you would invest 2,063 in Guggenheim Managed Futures on November 5, 2024 and sell it today you would lose (13.00) from holding Guggenheim Managed Futures or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Technology Portfolio vs. Guggenheim Managed Futures
Performance |
| Timeline |
| Global Technology |
| Guggenheim Managed |
Global Technology and Guggenheim Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Technology and Guggenheim Managed
The main advantage of trading using opposite Global Technology and Guggenheim Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Technology position performs unexpectedly, Guggenheim Managed 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 Guggenheim Managed will offset losses from the drop in Guggenheim Managed's long position.| Global Technology vs. Barings Global Floating | Global Technology vs. Pnc Balanced Allocation | Global Technology vs. Rational Strategic Allocation | Global Technology vs. Tfa Alphagen Growth |
| Guggenheim Managed vs. Lord Abbett Government | Guggenheim Managed vs. Franklin Adjustable Government | Guggenheim Managed vs. Virtus Seix Government | Guggenheim Managed vs. Dreyfus Government Cash |
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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