Correlation Between Guggenheim Strategic and Flaherty Crumrine

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

Diversification Opportunities for Guggenheim Strategic and Flaherty Crumrine

-0.15

Correlation Coefficient

Guggenheim Strategic  Flaherty Crumrine

Good diversification

The 3 months correlation between Guggenheim and Flaherty is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Flaherty Crumrine Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine Total 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 Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine Total has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Flaherty Crumrine go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and Flaherty Crumrine

Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to under-perform the Flaherty Crumrine. In addition to that, Guggenheim Strategic is 1.28 times more volatile than Flaherty Crumrine Total. It trades about -0.13 of its total potential returns per unit of risk. Flaherty Crumrine Total is currently generating about -0.04 per unit of volatility. If you would invest  1,694  in Flaherty Crumrine Total on September 12, 2024 and sell it today you would lose (6.00) from holding Flaherty Crumrine Total or give up 0.35% of portfolio value over 90 days.

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

Guggenheim Strategic Opportuni  vs.  Flaherty Crumrine Total

Guggenheim Strategic

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 11 (%) 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.

Flaherty Crumrine Total

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Flaherty Crumrine Total are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Flaherty Crumrine is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Guggenheim Strategic and Flaherty Crumrine

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

The idea behind Guggenheim Strategic Opportunities and Flaherty Crumrine Total 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.