Correlation Between Commodities Strategy and Guggenheim Multi-hedge
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy and Guggenheim Multi-hedge 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 Commodities Strategy and Guggenheim Multi-hedge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Guggenheim Multi Hedge Strategies, you can compare the effects of market volatilities on Commodities Strategy and Guggenheim Multi-hedge 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 Commodities Strategy with a short position of Guggenheim Multi-hedge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Guggenheim Multi-hedge.
Diversification Opportunities for Commodities Strategy and Guggenheim Multi-hedge
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Commodities and Guggenheim is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Guggenheim Multi Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Multi Hedge and Commodities Strategy 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 Commodities Strategy Fund are associated (or correlated) with Guggenheim Multi-hedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Multi Hedge has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Guggenheim Multi-hedge go up and down completely randomly.
Pair Corralation between Commodities Strategy and Guggenheim Multi-hedge
Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 2.25 times more return on investment than Guggenheim Multi-hedge. However, Commodities Strategy is 2.25 times more volatile than Guggenheim Multi Hedge Strategies. It trades about 0.01 of its potential returns per unit of risk. Guggenheim Multi Hedge Strategies is currently generating about 0.0 per unit of risk. If you would invest 2,888 in Commodities Strategy Fund on September 3, 2024 and sell it today you would earn a total of 39.00 from holding Commodities Strategy Fund or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Guggenheim Multi Hedge Strateg
Performance |
| Timeline |
| Commodities Strategy |
| Guggenheim Multi Hedge |
Commodities Strategy and Guggenheim Multi-hedge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Guggenheim Multi-hedge
The main advantage of trading using opposite Commodities Strategy and Guggenheim Multi-hedge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy position performs unexpectedly, Guggenheim Multi-hedge 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 Multi-hedge will offset losses from the drop in Guggenheim Multi-hedge's long position.The idea behind Commodities Strategy Fund and Guggenheim Multi Hedge Strategies 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.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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