Correlation Between Quantitative and Guggenheim Floating

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

By analyzing existing cross correlation between Quantitative Longshort Equity and Guggenheim Floating Rate, you can compare the effects of market volatilities on Quantitative and Guggenheim Floating 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 Quantitative with a short position of Guggenheim Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quantitative and Guggenheim Floating.

Diversification Opportunities for Quantitative and Guggenheim Floating

-0.12

Correlation Coefficient

Quantitative  Guggenheim Floating

Good diversification

The 3 months correlation between Quantitative and Guggenheim is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Quantitative Longshort Equity and Guggenheim Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Floating Rate and Quantitative 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 Quantitative Longshort Equity are associated (or correlated) with Guggenheim Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Floating Rate has no effect on the direction of Quantitative i.e., Quantitative and Guggenheim Floating go up and down completely randomly.

Pair Corralation between Quantitative and Guggenheim Floating

Assuming the 90 days horizon Quantitative Longshort Equity is expected to under-perform the Guggenheim Floating. In addition to that, Quantitative is 9.1 times more volatile than Guggenheim Floating Rate. It trades about -0.11 of its total potential returns per unit of risk. Guggenheim Floating Rate is currently generating about 0.11 per unit of volatility. If you would invest  2,394  in Guggenheim Floating Rate on December 2, 2024 and sell it today you would earn a total of  20.00  from holding Guggenheim Floating Rate or generate 0.84% return on investment over 90 days.

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

Quantitative Longshort Equity  vs.  Guggenheim Floating Rate

Quantitative Longshort

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quantitative Longshort Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Guggenheim Floating Rate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Floating Rate are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Guggenheim Floating is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Quantitative and Guggenheim Floating

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

The idea behind Quantitative Longshort Equity and Guggenheim Floating Rate 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.