Correlation Between Mairs Power and Guggenheim High
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Guggenheim High 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 Mairs Power and Guggenheim High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Growth and Guggenheim High Yield, you can compare the effects of market volatilities on Mairs Power and Guggenheim High 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 Mairs Power with a short position of Guggenheim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Guggenheim High.
Diversification Opportunities for Mairs Power and Guggenheim High
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mairs and Guggenheim is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth and Guggenheim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim High Yield and Mairs Power 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 Mairs Power Growth are associated (or correlated) with Guggenheim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim High Yield has no effect on the direction of Mairs Power i.e., Mairs Power and Guggenheim High go up and down completely randomly.
Pair Corralation between Mairs Power and Guggenheim High
Assuming the 90 days horizon Mairs Power Growth is expected to generate 3.31 times more return on investment than Guggenheim High. However, Mairs Power is 3.31 times more volatile than Guggenheim High Yield. It trades about 0.09 of its potential returns per unit of risk. Guggenheim High Yield is currently generating about 0.13 per unit of risk. If you would invest 11,985 in Mairs Power Growth on October 11, 2024 and sell it today you would earn a total of 5,232 from holding Mairs Power Growth or generate 43.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Growth vs. Guggenheim High Yield
Performance |
| Timeline |
| Mairs Power Growth |
| Guggenheim High Yield |
Mairs Power and Guggenheim High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Guggenheim High
The main advantage of trading using opposite Mairs Power and Guggenheim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Guggenheim High 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 High will offset losses from the drop in Guggenheim High's long position.| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
| Guggenheim High vs. Mairs Power Growth | Guggenheim High vs. Calamos Growth Fund | Guggenheim High vs. L Abbett Growth | Guggenheim High vs. T Rowe Price |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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