Correlation Between Guggenheim Taxable and Nuveen Mortgage

Can any of the company-specific risk be diversified away by investing in both Guggenheim Taxable and Nuveen Mortgage 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 Nuveen Mortgage 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 Nuveen Mortgage Opportunity, you can compare the effects of market volatilities on Guggenheim Taxable and Nuveen Mortgage 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 Nuveen Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Taxable and Nuveen Mortgage.

Diversification Opportunities for Guggenheim Taxable and Nuveen Mortgage

-0.55

Correlation Coefficient

Guggenheim Taxable  Nuveen Mortgage

Excellent diversification

The 3 months correlation between Guggenheim and Nuveen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Taxable Municipal and Nuveen Mortgage Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Mortgage Oppo 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 Nuveen Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Mortgage Oppo has no effect on the direction of Guggenheim Taxable i.e., Guggenheim Taxable and Nuveen Mortgage go up and down completely randomly.

Pair Corralation between Guggenheim Taxable and Nuveen Mortgage

Given the investment horizon of 90 days Guggenheim Taxable Municipal is expected to under-perform the Nuveen Mortgage. In addition to that, Guggenheim Taxable is 1.77 times more volatile than Nuveen Mortgage Opportunity. It trades about -0.15 of its total potential returns per unit of risk. Nuveen Mortgage Opportunity is currently generating about 0.13 per unit of volatility. If you would invest  1,774  in Nuveen Mortgage Opportunity on September 4, 2024 and sell it today you would earn a total of  67.00  from holding Nuveen Mortgage Opportunity or generate 3.78% return on investment over 90 days.

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

Guggenheim Taxable Municipal  vs.  Nuveen Mortgage Opportunity

Guggenheim Taxable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Taxable Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Nuveen Mortgage Oppo

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Mortgage Opportunity are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Nuveen Mortgage is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Guggenheim Taxable and Nuveen Mortgage

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

The idea behind Guggenheim Taxable Municipal and Nuveen Mortgage Opportunity 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..