Correlation Between Guggenheim Strategic and BlackRock Credit

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

Diversification Opportunities for Guggenheim Strategic and BlackRock Credit

0.08

Correlation Coefficient

Guggenheim Strategic  BlackRock Credit

Significant diversification

The 3 months correlation between Guggenheim and BlackRock is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and BlackRock Credit Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Credit All 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 Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Credit All has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and BlackRock Credit go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and BlackRock Credit

Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 0.88 times more return on investment than BlackRock Credit. However, Guggenheim Strategic Opportunities is 1.13 times less risky than BlackRock Credit. It trades about 0.2 of its potential returns per unit of risk. BlackRock Credit Allocation is currently generating about 0.06 per unit of risk. If you would invest  1,492  in Guggenheim Strategic Opportunities on August 30, 2024 and sell it today you would earn a total of  88.00  from holding Guggenheim Strategic Opportunities or generate 5.9% return on investment over 90 days.

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

Guggenheim Strategic Opportuni  vs.  BlackRock Credit Allocation

Guggenheim Strategic

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 15 (%) 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.

BlackRock Credit All

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Credit Allocation are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, BlackRock Credit is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guggenheim Strategic and BlackRock Credit

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

The idea behind Guggenheim Strategic Opportunities and BlackRock Credit Allocation 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.