Correlation Between Multi Manager and Guggenheim High
Can any of the company-specific risk be diversified away by investing in both Multi Manager 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 Multi Manager and Guggenheim High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and Guggenheim High Yield, you can compare the effects of market volatilities on Multi Manager 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 Multi Manager with a short position of Guggenheim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Guggenheim High.
Diversification Opportunities for Multi Manager and Guggenheim High
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Multi and GUGGENHEIM is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield 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 Multi Manager 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 Multi Manager High Yield 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 Multi Manager i.e., Multi Manager and Guggenheim High go up and down completely randomly.
Pair Corralation between Multi Manager and Guggenheim High
Assuming the 90 days horizon Multi Manager is expected to generate 1.01 times less return on investment than Guggenheim High. But when comparing it to its historical volatility, Multi Manager High Yield is 1.2 times less risky than Guggenheim High. It trades about 0.23 of its potential returns per unit of risk. Guggenheim High Yield is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,004 in Guggenheim High Yield on August 25, 2024 and sell it today you would earn a total of 6.00 from holding Guggenheim High Yield or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Guggenheim High Yield
Performance |
| Timeline |
| Multi Manager High |
| Guggenheim High Yield |
Multi Manager and Guggenheim High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Guggenheim High
The main advantage of trading using opposite Multi Manager and Guggenheim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager 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.| Multi Manager vs. Northern Bond Index | Multi Manager vs. Northern E Bond | Multi Manager vs. Northern Arizona Tax Exempt | Multi Manager vs. Northern Emerging Markets |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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