Correlation Between Guggenheim Managed and Jpmorgan Porate

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

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

Diversification Opportunities for Guggenheim Managed and Jpmorgan Porate

0.52

Correlation Coefficient

Guggenheim Managed  Jpmorgan Porate

Very weak diversification

The 3 months correlation between Guggenheim and Jpmorgan is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Jpmorgan Porate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Porate Bond and Guggenheim Managed 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 Managed Futures are associated (or correlated) with Jpmorgan Porate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Porate Bond has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Jpmorgan Porate go up and down completely randomly.

Pair Corralation between Guggenheim Managed and Jpmorgan Porate

Assuming the 90 days horizon Guggenheim Managed is expected to generate 1.3 times less return on investment than Jpmorgan Porate. In addition to that, Guggenheim Managed is 1.85 times more volatile than Jpmorgan Porate Bond. It trades about 0.01 of its total potential returns per unit of risk. Jpmorgan Porate Bond is currently generating about 0.03 per unit of volatility. If you would invest  783.00  in Jpmorgan Porate Bond on October 9, 2024 and sell it today you would earn a total of  41.00  from holding Jpmorgan Porate Bond or generate 5.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Guggenheim Managed Futures  vs.  Jpmorgan Porate Bond

Guggenheim Managed

Risk-Adjusted Performance

0 of 100

Weak

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

Jpmorgan Porate Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jpmorgan Porate Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Jpmorgan Porate 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 Managed and Jpmorgan Porate

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

The idea behind Guggenheim Managed Futures and Jpmorgan Porate Bond 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 Commodity Directory module to find actively traded commodities issued by global exchanges.