Correlation Between Guggenheim Multi-hedge and The Arbitrage
Can any of the company-specific risk be diversified away by investing in both Guggenheim Multi-hedge and The Arbitrage 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 Multi-hedge and The Arbitrage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Multi Hedge Strategies and The Arbitrage Fund, you can compare the effects of market volatilities on Guggenheim Multi-hedge and The Arbitrage 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 Multi-hedge with a short position of The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Multi-hedge and The Arbitrage.
Diversification Opportunities for Guggenheim Multi-hedge and The Arbitrage
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guggenheim and The is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Multi Hedge Strateg and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Arbitrage and Guggenheim Multi-hedge 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 Multi Hedge Strategies are associated (or correlated) with The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Arbitrage has no effect on the direction of Guggenheim Multi-hedge i.e., Guggenheim Multi-hedge and The Arbitrage go up and down completely randomly.
Pair Corralation between Guggenheim Multi-hedge and The Arbitrage
Assuming the 90 days horizon Guggenheim Multi Hedge Strategies is expected to generate 0.85 times more return on investment than The Arbitrage. However, Guggenheim Multi Hedge Strategies is 1.17 times less risky than The Arbitrage. It trades about 0.11 of its potential returns per unit of risk. The Arbitrage Fund is currently generating about -0.01 per unit of risk. If you would invest 2,600 in Guggenheim Multi Hedge Strategies on August 28, 2024 and sell it today you would earn a total of 15.00 from holding Guggenheim Multi Hedge Strategies or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Multi Hedge Strateg vs. The Arbitrage Fund
Performance |
| Timeline |
| Guggenheim Multi Hedge |
| The Arbitrage |
Guggenheim Multi-hedge and The Arbitrage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Multi-hedge and The Arbitrage
The main advantage of trading using opposite Guggenheim Multi-hedge and The Arbitrage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Multi-hedge position performs unexpectedly, The Arbitrage 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 The Arbitrage will offset losses from the drop in The Arbitrage's long position.The idea behind Guggenheim Multi Hedge Strategies and The Arbitrage Fund 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.
| The Arbitrage vs. The Merger Fund | The Arbitrage vs. Calamos Market Neutral | The Arbitrage vs. Hussman Strategic Growth | The Arbitrage vs. Gateway Fund Class |
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
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |