Correlation Between Astar and Guggenheim Mid

Can any of the company-specific risk be diversified away by investing in both Astar and Guggenheim Mid 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 Astar and Guggenheim Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astar and Guggenheim Mid Cap, you can compare the effects of market volatilities on Astar and Guggenheim Mid 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 Astar with a short position of Guggenheim Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Guggenheim Mid.

Diversification Opportunities for Astar and Guggenheim Mid

0.4

Correlation Coefficient

Astar  Guggenheim Mid

Very weak diversification

The 3 months correlation between Astar and Guggenheim is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Guggenheim Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Mid Cap and Astar 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 Astar are associated (or correlated) with Guggenheim Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Mid Cap has no effect on the direction of Astar i.e., Astar and Guggenheim Mid go up and down completely randomly.

Pair Corralation between Astar and Guggenheim Mid

Assuming the 90 days trading horizon Astar is expected to under-perform the Guggenheim Mid. In addition to that, Astar is 2.26 times more volatile than Guggenheim Mid Cap. It trades about -0.15 of its total potential returns per unit of risk. Guggenheim Mid Cap is currently generating about -0.3 per unit of volatility. If you would invest  4,255  in Guggenheim Mid Cap on October 11, 2024 and sell it today you would lose (589.00) from holding Guggenheim Mid Cap or give up 13.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Astar  vs.  Guggenheim Mid Cap

Astar

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Guggenheim Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Astar and Guggenheim Mid

The main advantage of trading using opposite Astar and Guggenheim Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Guggenheim Mid 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 Guggenheim Mid will offset losses from the drop in Guggenheim Mid's long position.

The idea behind Astar and Guggenheim Mid Cap 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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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.