Correlation Between Saba Capital and Guggenheim Strategic

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

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

Diversification Opportunities for Saba Capital and Guggenheim Strategic

0.23

Correlation Coefficient

Saba Capital  Guggenheim Strategic

Modest diversification

The 3 months correlation between Saba and Guggenheim is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Saba Capital Income and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Strategic and Saba Capital 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 Saba Capital Income are associated (or correlated) with Guggenheim Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Strategic has no effect on the direction of Saba Capital i.e., Saba Capital and Guggenheim Strategic go up and down completely randomly.

Pair Corralation between Saba Capital and Guggenheim Strategic

Considering the 90-day investment horizon Saba Capital Income is expected to generate 1.07 times more return on investment than Guggenheim Strategic. However, Saba Capital is 1.07 times more volatile than Guggenheim Strategic Opportunities. It trades about 0.18 of its potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.09 per unit of risk. If you would invest  671.00  in Saba Capital Income on October 21, 2024 and sell it today you would earn a total of  106.00  from holding Saba Capital Income or generate 15.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Saba Capital Income  vs.  Guggenheim Strategic Opportuni

Saba Capital Income

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Saba Capital Income are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Saba Capital may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Guggenheim Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Strategic Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Guggenheim Strategic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Saba Capital and Guggenheim Strategic

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

The idea behind Saba Capital Income and Guggenheim Strategic 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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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.