Correlation Between Guggenheim High and Parametric Intl
Can any of the company-specific risk be diversified away by investing in both Guggenheim High and Parametric Intl 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 Parametric Intl 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 Parametric Intl Equity, you can compare the effects of market volatilities on Guggenheim High and Parametric Intl 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 Parametric Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and Parametric Intl.
Diversification Opportunities for Guggenheim High and Parametric Intl
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GUGGENHEIM and Parametric is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield and Parametric Intl Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parametric Intl Equity 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 Parametric Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parametric Intl Equity has no effect on the direction of Guggenheim High i.e., Guggenheim High and Parametric Intl go up and down completely randomly.
Pair Corralation between Guggenheim High and Parametric Intl
Assuming the 90 days horizon Guggenheim High Yield is expected to generate 0.23 times more return on investment than Parametric Intl. However, Guggenheim High Yield is 4.28 times less risky than Parametric Intl. It trades about 0.2 of its potential returns per unit of risk. Parametric Intl Equity is currently generating about 0.02 per unit of risk. If you would invest 961.00 in Guggenheim High Yield on September 3, 2024 and sell it today you would earn a total of 50.00 from holding Guggenheim High Yield or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim High Yield vs. Parametric Intl Equity
Performance |
| Timeline |
| Guggenheim High Yield |
| Parametric Intl Equity |
Guggenheim High and Parametric Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim High and Parametric Intl
The main advantage of trading using opposite Guggenheim High and Parametric Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim High position performs unexpectedly, Parametric Intl 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 Parametric Intl will offset losses from the drop in Parametric Intl'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 |
| Parametric Intl vs. Blackrock High Yield | Parametric Intl vs. Prudential High Yield | Parametric Intl vs. Guggenheim High Yield | Parametric Intl vs. Lord Abbett High |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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