Correlation Between Guggenheim Managed and Inflation Protected

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

Diversification Opportunities for Guggenheim Managed and Inflation Protected

-0.13

Correlation Coefficient

Guggenheim Managed  Inflation Protected

Good diversification

The 3 months correlation between Guggenheim and Inflation is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Inflation Protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Inflation Protected go up and down completely randomly.

Pair Corralation between Guggenheim Managed and Inflation Protected

Assuming the 90 days horizon Guggenheim Managed Futures is expected to under-perform the Inflation Protected. In addition to that, Guggenheim Managed is 1.87 times more volatile than Inflation Protected Bond Fund. It trades about -0.1 of its total potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about -0.01 per unit of volatility. If you would invest  1,023  in Inflation Protected Bond Fund on December 27, 2024 and sell it today you would lose (2.00) from holding Inflation Protected Bond Fund or give up 0.2% of portfolio value over 90 days.

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

Guggenheim Managed Futures  vs.  Inflation Protected Bond Fund

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.

Inflation Protected

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Guggenheim Managed Futures and Inflation Protected Bond Fund 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.