Correlation Between Guggenheim High and City National
Can any of the company-specific risk be diversified away by investing in both Guggenheim High and City National 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 High and City National into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim High Yield and City National Rochdale, you can compare the effects of market volatilities on Guggenheim High and City National 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 High with a short position of City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and City National.
Diversification Opportunities for Guggenheim High and City National
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Guggenheim and City is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale and Guggenheim High 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 High Yield are associated (or correlated) with City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Guggenheim High i.e., Guggenheim High and City National go up and down completely randomly.
Pair Corralation between Guggenheim High and City National
Assuming the 90 days horizon Guggenheim High Yield is expected to generate 1.86 times more return on investment than City National. However, Guggenheim High is 1.86 times more volatile than City National Rochdale. It trades about 0.13 of its potential returns per unit of risk. City National Rochdale is currently generating about 0.22 per unit of risk. If you would invest 692.00 in Guggenheim High Yield on September 19, 2024 and sell it today you would earn a total of 124.00 from holding Guggenheim High Yield or generate 17.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim High Yield vs. City National Rochdale
Performance |
| Timeline |
| Guggenheim High Yield |
| City National Rochdale |
Guggenheim High and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim High and City National
The main advantage of trading using opposite Guggenheim High and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim High position performs unexpectedly, City National 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 City National will offset losses from the drop in City National's long position.| Guggenheim High vs. Goldman Sachs Inflation | Guggenheim High vs. Atac Inflation Rotation | Guggenheim High vs. Aqr Managed Futures | Guggenheim High vs. Lord Abbett Inflation |
| City National vs. American Funds Inflation | City National vs. Altegris Futures Evolution | City National vs. Deutsche Global Inflation | City National vs. Guidepath Managed Futures |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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