Correlation Between Guggenheim Taxable and BlackRock Health

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

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

Diversification Opportunities for Guggenheim Taxable and BlackRock Health

0.54

Correlation Coefficient

Guggenheim Taxable  BlackRock Health

Very weak diversification

The 3 months correlation between Guggenheim and BlackRock is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Taxable Municipal and BlackRock Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Health Sciences and Guggenheim Taxable 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 Taxable Municipal are associated (or correlated) with BlackRock Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Health Sciences has no effect on the direction of Guggenheim Taxable i.e., Guggenheim Taxable and BlackRock Health go up and down completely randomly.

Pair Corralation between Guggenheim Taxable and BlackRock Health

Given the investment horizon of 90 days Guggenheim Taxable is expected to generate 2.26 times less return on investment than BlackRock Health. But when comparing it to its historical volatility, Guggenheim Taxable Municipal is 2.0 times less risky than BlackRock Health. It trades about 0.08 of its potential returns per unit of risk. BlackRock Health Sciences is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,391  in BlackRock Health Sciences on December 31, 2024 and sell it today you would earn a total of  100.00  from holding BlackRock Health Sciences or generate 7.19% return on investment over 90 days.

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

Guggenheim Taxable Municipal  vs.  BlackRock Health Sciences

Guggenheim Taxable

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Taxable Municipal are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Guggenheim Taxable is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

BlackRock Health Sciences

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Health Sciences are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, BlackRock Health may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with Guggenheim Taxable and BlackRock Health

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

The idea behind Guggenheim Taxable Municipal and BlackRock Health Sciences 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.