Correlation Between Guggenheim Active and Guggenheim Taxable

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

By analyzing existing cross correlation between Guggenheim Active Allocation and Guggenheim Taxable Municipal, you can compare the effects of market volatilities on Guggenheim Active and Guggenheim Taxable 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 Active with a short position of Guggenheim Taxable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Active and Guggenheim Taxable.

Diversification Opportunities for Guggenheim Active and Guggenheim Taxable

0.48

Correlation Coefficient

Guggenheim Active  Guggenheim Taxable

Very weak diversification

The 3 months correlation between Guggenheim and Guggenheim is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Active Allocation and Guggenheim Taxable Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Taxable and Guggenheim Active 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 Active Allocation are associated (or correlated) with Guggenheim Taxable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Taxable has no effect on the direction of Guggenheim Active i.e., Guggenheim Active and Guggenheim Taxable go up and down completely randomly.

Pair Corralation between Guggenheim Active and Guggenheim Taxable

Considering the 90-day investment horizon Guggenheim Active Allocation is expected to generate 1.03 times more return on investment than Guggenheim Taxable. However, Guggenheim Active is 1.03 times more volatile than Guggenheim Taxable Municipal. It trades about 0.11 of its potential returns per unit of risk. Guggenheim Taxable Municipal is currently generating about 0.05 per unit of risk. If you would invest  1,269  in Guggenheim Active Allocation on September 4, 2024 and sell it today you would earn a total of  306.00  from holding Guggenheim Active Allocation or generate 24.11% return on investment over 90 days.

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

Guggenheim Active Allocation  vs.  Guggenheim Taxable Municipal

Guggenheim Active

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Active Allocation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guggenheim Active is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Guggenheim Taxable

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Taxable Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Guggenheim Active and Guggenheim Taxable

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

The idea behind Guggenheim Active Allocation and Guggenheim Taxable Municipal 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.