Correlation Between Guggenheim Mid and Cambiar Opportunity
Can any of the company-specific risk be diversified away by investing in both Guggenheim Mid and Cambiar Opportunity 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 Mid and Cambiar Opportunity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Mid Cap and Cambiar Opportunity Fund, you can compare the effects of market volatilities on Guggenheim Mid and Cambiar Opportunity 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 Mid with a short position of Cambiar Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Mid and Cambiar Opportunity.
Diversification Opportunities for Guggenheim Mid and Cambiar Opportunity
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Guggenheim and Cambiar is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Mid Cap and Cambiar Opportunity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambiar Opportunity and Guggenheim Mid 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 Mid Cap are associated (or correlated) with Cambiar Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambiar Opportunity has no effect on the direction of Guggenheim Mid i.e., Guggenheim Mid and Cambiar Opportunity go up and down completely randomly.
Pair Corralation between Guggenheim Mid and Cambiar Opportunity
Assuming the 90 days horizon Guggenheim Mid is expected to generate 1.37 times less return on investment than Cambiar Opportunity. But when comparing it to its historical volatility, Guggenheim Mid Cap is 1.1 times less risky than Cambiar Opportunity. It trades about 0.04 of its potential returns per unit of risk. Cambiar Opportunity Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,473 in Cambiar Opportunity Fund on September 3, 2024 and sell it today you would earn a total of 621.00 from holding Cambiar Opportunity Fund or generate 25.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Mid Cap vs. Cambiar Opportunity Fund
Performance |
| Timeline |
| Guggenheim Mid Cap |
| Cambiar Opportunity |
Guggenheim Mid and Cambiar Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Mid and Cambiar Opportunity
The main advantage of trading using opposite Guggenheim Mid and Cambiar Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Mid position performs unexpectedly, Cambiar Opportunity 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 Cambiar Opportunity will offset losses from the drop in Cambiar Opportunity's long position.| Guggenheim Mid vs. Touchstone Large Cap | Guggenheim Mid vs. Transamerica Large Cap | Guggenheim Mid vs. Jhancock Disciplined Value | Guggenheim Mid vs. Dana Large Cap |
| Cambiar Opportunity vs. Columbia Real Estate | Cambiar Opportunity vs. Dunham Real Estate | Cambiar Opportunity vs. Commonwealth Real Estate | Cambiar Opportunity vs. Virtus Real Estate |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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