Correlation Between Guggenheim Managed and Fidelity Advisor

Can any of the company-specific risk be diversified away by investing in both Guggenheim Managed and Fidelity Advisor 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 Fidelity Advisor 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 Fidelity Advisor 529, you can compare the effects of market volatilities on Guggenheim Managed and Fidelity Advisor 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 Fidelity Advisor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Managed and Fidelity Advisor.

Diversification Opportunities for Guggenheim Managed and Fidelity Advisor

0.65

Correlation Coefficient

Guggenheim Managed  Fidelity Advisor

Poor diversification

The 3 months correlation between Guggenheim and Fidelity is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Fidelity Advisor 529 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor 529 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 Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor 529 has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Guggenheim Managed and Fidelity Advisor

Assuming the 90 days horizon Guggenheim Managed Futures is expected to under-perform the Fidelity Advisor. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guggenheim Managed Futures is 1.41 times less risky than Fidelity Advisor. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Fidelity Advisor 529 is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  6,185  in Fidelity Advisor 529 on December 23, 2024 and sell it today you would lose (258.00) from holding Fidelity Advisor 529 or give up 4.17% of portfolio value over 90 days.

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

Guggenheim Managed Futures  vs.  Fidelity Advisor 529

Guggenheim Managed

Risk-Adjusted Performance

Very 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.

Fidelity Advisor 529

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fidelity Advisor 529 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Fidelity Advisor 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 Fidelity Advisor

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

The idea behind Guggenheim Managed Futures and Fidelity Advisor 529 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.