Correlation Between Guggenheim Macro and Guggenheim Total

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

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

Diversification Opportunities for Guggenheim Macro and Guggenheim Total

-0.2

Correlation Coefficient

Guggenheim Macro  Guggenheim Total

Good diversification

The 3 months correlation between Guggenheim and Guggenheim is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Macro Opportunities and Guggenheim Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Total Return and Guggenheim Macro 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 Macro Opportunities are associated (or correlated) with Guggenheim Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Total Return has no effect on the direction of Guggenheim Macro i.e., Guggenheim Macro and Guggenheim Total go up and down completely randomly.

Pair Corralation between Guggenheim Macro and Guggenheim Total

Assuming the 90 days horizon Guggenheim Macro is expected to generate 1.82 times less return on investment than Guggenheim Total. But when comparing it to its historical volatility, Guggenheim Macro Opportunities is 3.62 times less risky than Guggenheim Total. It trades about 0.24 of its potential returns per unit of risk. Guggenheim Total Return is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  2,371  in Guggenheim Total Return on September 4, 2024 and sell it today you would earn a total of  19.00  from holding Guggenheim Total Return or generate 0.8% return on investment over 90 days.

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

Guggenheim Macro Opportunities  vs.  Guggenheim Total Return

Guggenheim Macro Opp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Macro Opportunities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guggenheim Macro is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guggenheim Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Total Return has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Guggenheim Macro and Guggenheim Total

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

The idea behind Guggenheim Macro Opportunities and Guggenheim Total Return 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.