Correlation Between NYSE Composite and Guggenheim Macro
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Guggenheim Macro 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 NYSE Composite and Guggenheim Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Guggenheim Macro Opportunities, you can compare the effects of market volatilities on NYSE Composite and Guggenheim Macro 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 NYSE Composite with a short position of Guggenheim Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Guggenheim Macro.
Diversification Opportunities for NYSE Composite and Guggenheim Macro
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Guggenheim is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Guggenheim Macro Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Macro Opp and NYSE Composite 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 NYSE Composite are associated (or correlated) with Guggenheim Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Macro Opp has no effect on the direction of NYSE Composite i.e., NYSE Composite and Guggenheim Macro go up and down completely randomly.
Pair Corralation between NYSE Composite and Guggenheim Macro
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.79 times more return on investment than Guggenheim Macro. However, NYSE Composite is 3.79 times more volatile than Guggenheim Macro Opportunities. It trades about 0.08 of its potential returns per unit of risk. Guggenheim Macro Opportunities is currently generating about 0.16 per unit of risk. If you would invest 1,539,994 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 480,988 from holding NYSE Composite or generate 31.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Guggenheim Macro Opportunities
Performance |
| Timeline |
NYSE Composite and Guggenheim Macro Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Guggenheim Macro Opportunities
Pair trading matchups for Guggenheim Macro
Pair Trading with NYSE Composite and Guggenheim Macro
The main advantage of trading using opposite NYSE Composite and Guggenheim Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Guggenheim Macro 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 Macro will offset losses from the drop in Guggenheim Macro's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
| Guggenheim Macro vs. HUMANA INC | Guggenheim Macro vs. Aquagold International | Guggenheim Macro vs. Barloworld Ltd ADR | Guggenheim Macro vs. Morningstar Unconstrained Allocation |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |