Correlation Between Guggenheim Strategic and BlackRock

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

Diversification Opportunities for Guggenheim Strategic and BlackRock

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Guggenheim and BlackRock is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and BlackRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock 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 BlackRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and BlackRock go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and BlackRock

Considering the 90-day investment horizon Guggenheim Strategic is expected to generate 2.66 times less return on investment than BlackRock. But when comparing it to its historical volatility, Guggenheim Strategic Opportunities is 2.46 times less risky than BlackRock. It trades about 0.26 of its potential returns per unit of risk. BlackRock is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  86,182  in BlackRock on September 6, 2024 and sell it today you would earn a total of  17,318  from holding BlackRock or generate 20.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Guggenheim Strategic Opportuni  vs.  BlackRock

 Performance 
       Timeline  
Guggenheim Strategic 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Guggenheim Strategic may actually be approaching a critical reversion point that can send shares even higher in January 2025.
BlackRock 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal essential indicators, BlackRock disclosed solid returns over the last few months and may actually be approaching a breakup point.

Guggenheim Strategic and BlackRock Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guggenheim Strategic and BlackRock

The main advantage of trading using opposite Guggenheim Strategic and BlackRock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Strategic position performs unexpectedly, BlackRock 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 will offset losses from the drop in BlackRock's long position.
The idea behind Guggenheim Strategic Opportunities and BlackRock 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.
Check out your portfolio center.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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