Correlation Between Guggenheim Managed and Guidemark(r) Core
Can any of the company-specific risk be diversified away by investing in both Guggenheim Managed and Guidemark(r) Core 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 Managed and Guidemark(r) Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Managed Futures and Guidemark E Fixed, you can compare the effects of market volatilities on Guggenheim Managed and Guidemark(r) Core 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 Managed with a short position of Guidemark(r) Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Managed and Guidemark(r) Core.
Diversification Opportunities for Guggenheim Managed and Guidemark(r) Core
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guggenheim and Guidemark(r) is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Guidemark E Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidemark E Fixed and Guggenheim Managed 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 Managed Futures are associated (or correlated) with Guidemark(r) Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidemark E Fixed has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Guidemark(r) Core go up and down completely randomly.
Pair Corralation between Guggenheim Managed and Guidemark(r) Core
Assuming the 90 days horizon Guggenheim Managed Futures is expected to generate 2.21 times more return on investment than Guidemark(r) Core. However, Guggenheim Managed is 2.21 times more volatile than Guidemark E Fixed. It trades about 0.17 of its potential returns per unit of risk. Guidemark E Fixed is currently generating about -0.09 per unit of risk. If you would invest 1,963 in Guggenheim Managed Futures on October 26, 2024 and sell it today you would earn a total of 78.00 from holding Guggenheim Managed Futures or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Managed Futures vs. Guidemark E Fixed
Performance |
| Timeline |
| Guggenheim Managed |
| Guidemark E Fixed |
Guggenheim Managed and Guidemark(r) Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Managed and Guidemark(r) Core
The main advantage of trading using opposite Guggenheim Managed and Guidemark(r) Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Managed position performs unexpectedly, Guidemark(r) Core 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 Guidemark(r) Core will offset losses from the drop in Guidemark(r) Core's long position.The idea behind Guggenheim Managed Futures and Guidemark E Fixed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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