Correlation Between Ford and Guggenheim Active
Can any of the company-specific risk be diversified away by investing in both Ford and Guggenheim Active 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 Ford and Guggenheim Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Guggenheim Active Allocation, you can compare the effects of market volatilities on Ford and Guggenheim Active 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 Ford with a short position of Guggenheim Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Guggenheim Active.
Diversification Opportunities for Ford and Guggenheim Active
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ford and Guggenheim is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Guggenheim Active Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Active and Ford 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 Ford Motor are associated (or correlated) with Guggenheim Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Active has no effect on the direction of Ford i.e., Ford and Guggenheim Active go up and down completely randomly.
Pair Corralation between Ford and Guggenheim Active
Taking into account the 90-day investment horizon Ford Motor is expected to under-perform the Guggenheim Active. In addition to that, Ford is 2.67 times more volatile than Guggenheim Active Allocation. It trades about -0.09 of its total potential returns per unit of risk. Guggenheim Active Allocation is currently generating about 0.04 per unit of volatility. If you would invest 1,539 in Guggenheim Active Allocation on December 1, 2024 and sell it today you would earn a total of 22.00 from holding Guggenheim Active Allocation or generate 1.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ford Motor vs. Guggenheim Active Allocation
Performance |
Timeline |
Ford Motor |
Guggenheim Active |
Ford and Guggenheim Active Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ford and Guggenheim Active
The main advantage of trading using opposite Ford and Guggenheim Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Guggenheim Active 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 Active will offset losses from the drop in Guggenheim Active's long position.The idea behind Ford Motor and Guggenheim Active Allocation 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.Guggenheim Active vs. Cohen Steers Real | Guggenheim Active vs. RiverNorth Flexible Municipalome | Guggenheim Active vs. Western Asset Diversified | Guggenheim Active vs. Cohen Steers Tax Advantaged |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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