Correlation Between James Alpha and Guggenheim Macro
Can any of the company-specific risk be diversified away by investing in both James Alpha and Guggenheim Macro 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 James Alpha and Guggenheim Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between James Alpha Global and Guggenheim Macro Opportunities, you can compare the effects of market volatilities on James Alpha and Guggenheim Macro 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 James Alpha with a short position of Guggenheim Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of James Alpha and Guggenheim Macro.
Diversification Opportunities for James Alpha and Guggenheim Macro
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between James and Guggenheim is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding James Alpha Global and Guggenheim Macro Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Macro Opp and James Alpha 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 James Alpha Global are associated (or correlated) with Guggenheim Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Macro Opp has no effect on the direction of James Alpha i.e., James Alpha and Guggenheim Macro go up and down completely randomly.
Pair Corralation between James Alpha and Guggenheim Macro
Assuming the 90 days horizon James Alpha Global is expected to under-perform the Guggenheim Macro. In addition to that, James Alpha is 6.67 times more volatile than Guggenheim Macro Opportunities. It trades about -0.01 of its total potential returns per unit of risk. Guggenheim Macro Opportunities is currently generating about 0.15 per unit of volatility. If you would invest 2,458 in Guggenheim Macro Opportunities on December 3, 2024 and sell it today you would earn a total of 28.00 from holding Guggenheim Macro Opportunities or generate 1.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.36% |
Values | Daily Returns |
James Alpha Global vs. Guggenheim Macro Opportunities
Performance |
Timeline |
James Alpha Global |
Guggenheim Macro Opp |
James Alpha and Guggenheim Macro Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with James Alpha and Guggenheim Macro
The main advantage of trading using opposite James Alpha and Guggenheim Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if James Alpha position performs unexpectedly, Guggenheim Macro 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 Macro will offset losses from the drop in Guggenheim Macro's long position.James Alpha vs. James Alpha Global | James Alpha vs. James Alpha Global | James Alpha vs. Virtus Global Real | James Alpha vs. Virtus Global Real |
Guggenheim Macro vs. Guggenheim Total Return | Guggenheim Macro vs. Guggenheim Floating Rate | Guggenheim Macro vs. Guggenheim Limited Duration | Guggenheim Macro vs. Pimco Incme Fund |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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