Correlation Between Guggenheim High and Johcm International
Can any of the company-specific risk be diversified away by investing in both Guggenheim High and Johcm International 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 Johcm International 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 Johcm International Opportunities, you can compare the effects of market volatilities on Guggenheim High and Johcm International 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 Johcm International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and Johcm International.
Diversification Opportunities for Guggenheim High and Johcm International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between GUGGENHEIM and Johcm is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield and Johcm International Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johcm International 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 Johcm International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johcm International has no effect on the direction of Guggenheim High i.e., Guggenheim High and Johcm International go up and down completely randomly.
Pair Corralation between Guggenheim High and Johcm International
Assuming the 90 days horizon Guggenheim High Yield is expected to generate 0.2 times more return on investment than Johcm International. However, Guggenheim High Yield is 5.04 times less risky than Johcm International. It trades about 0.15 of its potential returns per unit of risk. Johcm International Opportunities is currently generating about -0.05 per unit of risk. If you would invest 1,007 in Guggenheim High Yield on September 4, 2024 and sell it today you would earn a total of 4.00 from holding Guggenheim High Yield or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Guggenheim High Yield vs. Johcm International Opportunit
Performance |
| Timeline |
| Guggenheim High Yield |
| Johcm International |
Guggenheim High and Johcm International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim High and Johcm International
The main advantage of trading using opposite Guggenheim High and Johcm International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim High position performs unexpectedly, Johcm International 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 Johcm International will offset losses from the drop in Johcm International's long position.The idea behind Guggenheim High Yield and Johcm International Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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