Correlation Between Horizon Technology and Guggenheim Strategic

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

By analyzing existing cross correlation between Horizon Technology Finance and Guggenheim Strategic Opportunities, you can compare the effects of market volatilities on Horizon Technology and Guggenheim Strategic 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 Horizon Technology with a short position of Guggenheim Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Technology and Guggenheim Strategic.

Diversification Opportunities for Horizon Technology and Guggenheim Strategic

0.81

Correlation Coefficient

Horizon Technology  Guggenheim Strategic

Very poor diversification

The 3 months correlation between Horizon and Guggenheim is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Strategic and Horizon Technology 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 Horizon Technology Finance are associated (or correlated) with Guggenheim Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Strategic has no effect on the direction of Horizon Technology i.e., Horizon Technology and Guggenheim Strategic go up and down completely randomly.

Pair Corralation between Horizon Technology and Guggenheim Strategic

Given the investment horizon of 90 days Horizon Technology Finance is expected to generate 1.82 times more return on investment than Guggenheim Strategic. However, Horizon Technology is 1.82 times more volatile than Guggenheim Strategic Opportunities. It trades about 0.12 of its potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.07 per unit of risk. If you would invest  902.00  in Horizon Technology Finance on December 2, 2024 and sell it today you would earn a total of  83.00  from holding Horizon Technology Finance or generate 9.2% return on investment over 90 days.

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

Horizon Technology Finance  vs.  Guggenheim Strategic Opportuni

Horizon Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Horizon Technology Finance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Horizon Technology may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Guggenheim Strategic

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 5 (%) 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.

Pair Trading with Horizon Technology and Guggenheim Strategic

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

The idea behind Horizon Technology Finance and Guggenheim Strategic Opportunities 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.