Correlation Between Scharf Fund and Guggenheim Energy

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

By analyzing existing cross correlation between Scharf Fund Retail and Guggenheim Energy Income, you can compare the effects of market volatilities on Scharf Fund and Guggenheim Energy 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 Scharf Fund with a short position of Guggenheim Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Guggenheim Energy.

Diversification Opportunities for Scharf Fund and Guggenheim Energy

0.0

Correlation Coefficient

Scharf Fund  Guggenheim Energy

Pay attention - limited upside

The 3 months correlation between Scharf and Guggenheim is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and Guggenheim Energy Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Energy Income and Scharf Fund 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 Scharf Fund Retail are associated (or correlated) with Guggenheim Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Energy Income has no effect on the direction of Scharf Fund i.e., Scharf Fund and Guggenheim Energy go up and down completely randomly.

Pair Corralation between Scharf Fund and Guggenheim Energy

Assuming the 90 days horizon Scharf Fund Retail is expected to generate 3.28 times more return on investment than Guggenheim Energy. However, Scharf Fund is 3.28 times more volatile than Guggenheim Energy Income. It trades about 0.02 of its potential returns per unit of risk. Guggenheim Energy Income is currently generating about 0.04 per unit of risk. If you would invest  4,815  in Scharf Fund Retail on October 4, 2024 and sell it today you would earn a total of  322.00  from holding Scharf Fund Retail or generate 6.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	26.67%
Values	Daily Returns

Scharf Fund Retail  vs.  Guggenheim Energy Income

Scharf Fund Retail

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Scharf Fund Retail 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 Energy Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Scharf Fund and Guggenheim Energy

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

The idea behind Scharf Fund Retail and Guggenheim Energy Income 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.