Correlation Between Eagle Pointome and Guggenheim Strategic

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

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

Diversification Opportunities for Eagle Pointome and Guggenheim Strategic

0.81

Correlation Coefficient

Eagle Pointome  Guggenheim Strategic

Very poor diversification

The 3 months correlation between Eagle and Guggenheim is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Pointome and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Strategic and Eagle Pointome 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 Eagle Pointome 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 Eagle Pointome i.e., Eagle Pointome and Guggenheim Strategic go up and down completely randomly.

Pair Corralation between Eagle Pointome and Guggenheim Strategic

Considering the 90-day investment horizon Eagle Pointome is expected to generate 1.8 times less return on investment than Guggenheim Strategic. In addition to that, Eagle Pointome is 1.97 times more volatile than Guggenheim Strategic Opportunities. It trades about 0.07 of its total potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.24 per unit of volatility. If you would invest  1,477  in Guggenheim Strategic Opportunities on September 2, 2024 and sell it today you would earn a total of  103.00  from holding Guggenheim Strategic Opportunities or generate 6.97% return on investment over 90 days.

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

Eagle Pointome  vs.  Guggenheim Strategic Opportuni

Eagle Pointome

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Eagle Pointome are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Eagle Pointome is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Guggenheim Strategic

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Guggenheim Strategic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Eagle Pointome and Guggenheim Strategic

The main advantage of trading using opposite Eagle Pointome and Guggenheim Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Pointome 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 Eagle Pointome 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.