Correlation Between Guggenheim Managed and Forty Portfolio

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

Diversification Opportunities for Guggenheim Managed and Forty Portfolio

-0.13

Correlation Coefficient

Guggenheim Managed  Forty Portfolio

Good diversification

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

Pair Corralation between Guggenheim Managed and Forty Portfolio

Assuming the 90 days horizon Guggenheim Managed Futures is expected to under-perform the Forty Portfolio. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guggenheim Managed Futures is 1.39 times less risky than Forty Portfolio. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Forty Portfolio Institutional is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  5,509  in Forty Portfolio Institutional on September 14, 2024 and sell it today you would earn a total of  443.00  from holding Forty Portfolio Institutional or generate 8.04% return on investment over 90 days.

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

Guggenheim Managed Futures  vs.  Forty Portfolio Institutional

Guggenheim Managed

Risk-Adjusted Performance

0 of 100

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.

Forty Portfolio Inst

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Forty Portfolio Institutional are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Forty Portfolio may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Guggenheim Managed and Forty Portfolio

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

The idea behind Guggenheim Managed Futures and Forty Portfolio Institutional 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.