Correlation Between Guggenheim High and Oberweis Emerging
Can any of the company-specific risk be diversified away by investing in both Guggenheim High and Oberweis Emerging 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 Oberweis Emerging 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 Oberweis Emerging Markets, you can compare the effects of market volatilities on Guggenheim High and Oberweis Emerging 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 Oberweis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and Oberweis Emerging.
Diversification Opportunities for Guggenheim High and Oberweis Emerging
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GUGGENHEIM and Oberweis is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield and Oberweis Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oberweis Emerging Markets 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 Oberweis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oberweis Emerging Markets has no effect on the direction of Guggenheim High i.e., Guggenheim High and Oberweis Emerging go up and down completely randomly.
Pair Corralation between Guggenheim High and Oberweis Emerging
Assuming the 90 days horizon Guggenheim High Yield is expected to generate 4.77 times more return on investment than Oberweis Emerging. However, Guggenheim High is 4.77 times more volatile than Oberweis Emerging Markets. It trades about 0.15 of its potential returns per unit of risk. Oberweis Emerging Markets is currently generating about -0.28 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 | Very Weak |
| Accuracy | 65.0% |
| Values | Daily Returns |
Guggenheim High Yield vs. Oberweis Emerging Markets
Performance |
| Timeline |
| Guggenheim High Yield |
| Oberweis Emerging Markets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Guggenheim High and Oberweis Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim High and Oberweis Emerging
The main advantage of trading using opposite Guggenheim High and Oberweis Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim High position performs unexpectedly, Oberweis Emerging 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 Oberweis Emerging will offset losses from the drop in Oberweis Emerging's long position.The idea behind Guggenheim High Yield and Oberweis Emerging Markets 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.
| Oberweis Emerging vs. Ppm High Yield | Oberweis Emerging vs. Pgim High Yield | Oberweis Emerging vs. Blackrock High Yield | Oberweis Emerging vs. American Century 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |