Correlation Between Energy Services and Guggenheim High
Can any of the company-specific risk be diversified away by investing in both Energy Services and Guggenheim High 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 Energy Services and Guggenheim High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Services Fund and Guggenheim High Yield, you can compare the effects of market volatilities on Energy Services and Guggenheim High 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 Energy Services with a short position of Guggenheim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Services and Guggenheim High.
Diversification Opportunities for Energy Services and Guggenheim High
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ENERGY and Guggenheim is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Energy Services Fund and Guggenheim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim High Yield and Energy Services 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 Energy Services Fund are associated (or correlated) with Guggenheim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim High Yield has no effect on the direction of Energy Services i.e., Energy Services and Guggenheim High go up and down completely randomly.
Pair Corralation between Energy Services and Guggenheim High
Assuming the 90 days horizon Energy Services is expected to generate 2.98 times less return on investment than Guggenheim High. In addition to that, Energy Services is 8.32 times more volatile than Guggenheim High Yield. It trades about 0.01 of its total potential returns per unit of risk. Guggenheim High Yield is currently generating about 0.2 per unit of volatility. If you would invest 726.00 in Guggenheim High Yield on October 28, 2024 and sell it today you would earn a total of 89.00 from holding Guggenheim High Yield or generate 12.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Services Fund vs. Guggenheim High Yield
Performance |
| Timeline |
| Energy Services |
| Guggenheim High Yield |
Energy Services and Guggenheim High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Services and Guggenheim High
The main advantage of trading using opposite Energy Services and Guggenheim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Services position performs unexpectedly, Guggenheim High 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 High will offset losses from the drop in Guggenheim High's long position.| Energy Services vs. Energy Fund Investor | Energy Services vs. Basic Materials Fund | Energy Services vs. Electronics Fund Investor | Energy Services vs. Health Care Fund |
| Guggenheim High vs. Delaware Limited Term Diversified | Guggenheim High vs. Lord Abbett Diversified | Guggenheim High vs. Fidelity New Markets | Guggenheim High vs. Ashmore Emerging Markets |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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