Correlation Between Guggenheim Strategic and Nuveen Mortgage

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

Diversification Opportunities for Guggenheim Strategic and Nuveen Mortgage

0.86

Correlation Coefficient

Guggenheim Strategic  Nuveen Mortgage

Very poor diversification

The 3 months correlation between Guggenheim and Nuveen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Nuveen Mortgage Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Mortgage Oppo 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 Nuveen Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Mortgage Oppo has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Nuveen Mortgage go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and Nuveen Mortgage

Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 1.21 times more return on investment than Nuveen Mortgage. However, Guggenheim Strategic is 1.21 times more volatile than Nuveen Mortgage Opportunity. It trades about 0.23 of its potential returns per unit of risk. Nuveen Mortgage Opportunity is currently generating about 0.22 per unit of risk. If you would invest  1,469  in Guggenheim Strategic Opportunities on December 23, 2024 and sell it today you would earn a total of  120.00  from holding Guggenheim Strategic Opportunities or generate 8.17% return on investment over 90 days.

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

Guggenheim Strategic Opportuni  vs.  Nuveen Mortgage Opportunity

Guggenheim Strategic

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 17 (%) 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 April 2025.

Nuveen Mortgage Oppo

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Mortgage Opportunity are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent essential indicators, Nuveen Mortgage may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Guggenheim Strategic and Nuveen Mortgage

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

The idea behind Guggenheim Strategic Opportunities and Nuveen Mortgage Opportunity 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.