Correlation Between Guggenheim Managed and Nicholas
Can any of the company-specific risk be diversified away by investing in both Guggenheim Managed and Nicholas 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 Nicholas 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 Nicholas Ltd Edition, you can compare the effects of market volatilities on Guggenheim Managed and Nicholas 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 Nicholas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Managed and Nicholas.
Diversification Opportunities for Guggenheim Managed and Nicholas
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guggenheim and Nicholas is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Nicholas Ltd Edition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Edition 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 Nicholas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Edition has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Nicholas go up and down completely randomly.
Pair Corralation between Guggenheim Managed and Nicholas
Assuming the 90 days horizon Guggenheim Managed is expected to generate 2.86 times less return on investment than Nicholas. But when comparing it to its historical volatility, Guggenheim Managed Futures is 1.65 times less risky than Nicholas. It trades about 0.04 of its potential returns per unit of risk. Nicholas Ltd Edition is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,538 in Nicholas Ltd Edition on November 3, 2024 and sell it today you would earn a total of 250.00 from holding Nicholas Ltd Edition or generate 9.85% 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. Nicholas Ltd Edition
Performance |
| Timeline |
| Guggenheim Managed |
| Nicholas Edition |
Guggenheim Managed and Nicholas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Managed and Nicholas
The main advantage of trading using opposite Guggenheim Managed and Nicholas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Managed position performs unexpectedly, Nicholas 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 Nicholas will offset losses from the drop in Nicholas' long position.| Guggenheim Managed vs. Highland Longshort Healthcare | Guggenheim Managed vs. Alger Health Sciences | Guggenheim Managed vs. Invesco Global Health | Guggenheim Managed vs. Allianzgi Health Sciences |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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