Correlation Between Guggenheim Risk and Barings Active

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

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

Diversification Opportunities for Guggenheim Risk and Barings Active

0.08

Correlation Coefficient

Guggenheim Risk  Barings Active

Significant diversification

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

Pair Corralation between Guggenheim Risk and Barings Active

Assuming the 90 days horizon Guggenheim Risk is expected to generate 1.54 times less return on investment than Barings Active. In addition to that, Guggenheim Risk is 6.44 times more volatile than Barings Active Short. It trades about 0.01 of its total potential returns per unit of risk. Barings Active Short is currently generating about 0.14 per unit of volatility. If you would invest  834.00  in Barings Active Short on September 29, 2024 and sell it today you would earn a total of  90.00  from holding Barings Active Short or generate 10.79% return on investment over 90 days.

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

Guggenheim Risk Managed  vs.  Barings Active Short

Guggenheim Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Risk Managed 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.

Barings Active Short

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barings Active Short has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Barings Active is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Guggenheim Risk and Barings Active

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

The idea behind Guggenheim Risk Managed and Barings Active Short 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.