Correlation Between Guggenheim Total and Fidelity Worldwide

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

By analyzing existing cross correlation between Guggenheim Total Return and Fidelity Worldwide Fund, you can compare the effects of market volatilities on Guggenheim Total and Fidelity Worldwide 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 Total with a short position of Fidelity Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Total and Fidelity Worldwide.

Diversification Opportunities for Guggenheim Total and Fidelity Worldwide

0.58

Correlation Coefficient

Guggenheim Total  Fidelity Worldwide

Very weak diversification

The 3 months correlation between Guggenheim and Fidelity is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Total Return and Fidelity Worldwide Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Worldwide and Guggenheim Total 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 Total Return are associated (or correlated) with Fidelity Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Worldwide has no effect on the direction of Guggenheim Total i.e., Guggenheim Total and Fidelity Worldwide go up and down completely randomly.

Pair Corralation between Guggenheim Total and Fidelity Worldwide

Assuming the 90 days horizon Guggenheim Total Return is expected to generate 0.16 times more return on investment than Fidelity Worldwide. However, Guggenheim Total Return is 6.42 times less risky than Fidelity Worldwide. It trades about 0.03 of its potential returns per unit of risk. Fidelity Worldwide Fund is currently generating about -0.13 per unit of risk. If you would invest  2,374  in Guggenheim Total Return on November 28, 2024 and sell it today you would earn a total of  10.00  from holding Guggenheim Total Return or generate 0.42% return on investment over 90 days.

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

Guggenheim Total Return  vs.  Fidelity Worldwide Fund

Guggenheim Total Return

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Total Return are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Guggenheim Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Fidelity Worldwide

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Worldwide Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Guggenheim Total and Fidelity Worldwide

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

The idea behind Guggenheim Total Return and Fidelity Worldwide Fund 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.