Correlation Between Guggenheim Strategic and Pioneer Solutions

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

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

Diversification Opportunities for Guggenheim Strategic and Pioneer Solutions

0.9

Correlation Coefficient

Guggenheim Strategic  Pioneer Solutions

Almost no diversification

The 3 months correlation between Guggenheim and Pioneer is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Pioneer Solutions Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pioneer Solutions and Guggenheim Strategic 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 Strategic Opportunities are associated (or correlated) with Pioneer Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pioneer Solutions has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Pioneer Solutions go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and Pioneer Solutions

Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 1.25 times more return on investment than Pioneer Solutions. However, Guggenheim Strategic is 1.25 times more volatile than Pioneer Solutions Balanced. It trades about 0.17 of its potential returns per unit of risk. Pioneer Solutions Balanced is currently generating about 0.15 per unit of risk. If you would invest  1,466  in Guggenheim Strategic Opportunities on December 30, 2024 and sell it today you would earn a total of  88.00  from holding Guggenheim Strategic Opportunities or generate 6.0% return on investment over 90 days.

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

Guggenheim Strategic Opportuni  vs.  Pioneer Solutions Balanced

Guggenheim Strategic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guggenheim Strategic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pioneer Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pioneer Solutions Balanced are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Pioneer Solutions 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 Strategic and Pioneer Solutions

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

The idea behind Guggenheim Strategic Opportunities and Pioneer Solutions Balanced 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.