Correlation Between Guggenheim High and Municipal Bond
Can any of the company-specific risk be diversified away by investing in both Guggenheim High and Municipal Bond 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 Municipal Bond 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 Municipal Bond Fund, you can compare the effects of market volatilities on Guggenheim High and Municipal Bond 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 Municipal Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and Municipal Bond.
Diversification Opportunities for Guggenheim High and Municipal Bond
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guggenheim and Municipal is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield and Municipal Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Municipal Bond 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 Municipal Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Municipal Bond has no effect on the direction of Guggenheim High i.e., Guggenheim High and Municipal Bond go up and down completely randomly.
Pair Corralation between Guggenheim High and Municipal Bond
Assuming the 90 days horizon Guggenheim High Yield is expected to generate 0.8 times more return on investment than Municipal Bond. However, Guggenheim High Yield is 1.25 times less risky than Municipal Bond. It trades about 0.08 of its potential returns per unit of risk. Municipal Bond Fund is currently generating about 0.0 per unit of risk. If you would invest 813.00 in Guggenheim High Yield on November 6, 2024 and sell it today you would earn a total of 2.00 from holding Guggenheim High Yield or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim High Yield vs. Municipal Bond Fund
Performance |
| Timeline |
| Guggenheim High Yield |
| Municipal Bond |
Guggenheim High and Municipal Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim High and Municipal Bond
The main advantage of trading using opposite Guggenheim High and Municipal Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim High position performs unexpectedly, Municipal Bond 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 Municipal Bond will offset losses from the drop in Municipal Bond's long position.| Guggenheim High vs. Us Vector Equity | Guggenheim High vs. Transamerica International Equity | Guggenheim High vs. Aqr Long Short Equity | Guggenheim High vs. Ultra Short Fixed Income |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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