Correlation Between Guggenheim High and Calvert High
Can any of the company-specific risk be diversified away by investing in both Guggenheim High and Calvert 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 Guggenheim High and Calvert High 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 Calvert High Yield, you can compare the effects of market volatilities on Guggenheim High and Calvert 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 Guggenheim High with a short position of Calvert High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and Calvert High.
Diversification Opportunities for Guggenheim High and Calvert High
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GUGGENHEIM and Calvert is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield and Calvert High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert High Yield 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 Calvert High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert High Yield has no effect on the direction of Guggenheim High i.e., Guggenheim High and Calvert High go up and down completely randomly.
Pair Corralation between Guggenheim High and Calvert High
Assuming the 90 days horizon Guggenheim High is expected to generate 2.83 times less return on investment than Calvert High. But when comparing it to its historical volatility, Guggenheim High Yield is 1.05 times less risky than Calvert High. It trades about 0.02 of its potential returns per unit of risk. Calvert High Yield is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,490 in Calvert High Yield on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Calvert High Yield or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim High Yield vs. Calvert High Yield
Performance |
| Timeline |
| Guggenheim High Yield |
| Calvert High Yield |
Guggenheim High and Calvert High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim High and Calvert High
The main advantage of trading using opposite Guggenheim High and Calvert High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim High position performs unexpectedly, Calvert 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 Calvert High will offset losses from the drop in Calvert High's long position.| Guggenheim High vs. Vanguard High Yield Corporate | Guggenheim High vs. Vanguard High Yield Porate | Guggenheim High vs. Blackrock Hi Yld | Guggenheim High vs. Blackrock High Yield |
| Calvert High vs. Vanguard High Yield Corporate | Calvert High vs. Vanguard High Yield Porate | Calvert High vs. Blackrock Hi Yld | Calvert High vs. Blackrock High Yield |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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