Correlation Between Guggenheim Managed and Advantage Portfolio

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

Diversification Opportunities for Guggenheim Managed and Advantage Portfolio

0.57

Correlation Coefficient

Guggenheim Managed  Advantage Portfolio

Very weak diversification

The 3 months correlation between Guggenheim and Advantage is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Advantage Portfolio Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Portfolio Class 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 Advantage Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Portfolio Class has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Advantage Portfolio go up and down completely randomly.

Pair Corralation between Guggenheim Managed and Advantage Portfolio

Assuming the 90 days horizon Guggenheim Managed Futures is expected to under-perform the Advantage Portfolio. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guggenheim Managed Futures is 2.3 times less risky than Advantage Portfolio. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Advantage Portfolio Class is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,132  in Advantage Portfolio Class on December 25, 2024 and sell it today you would lose (80.00) from holding Advantage Portfolio Class or give up 3.75% of portfolio value over 90 days.

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

Guggenheim Managed Futures  vs.  Advantage Portfolio Class

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 latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Advantage Portfolio Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Advantage Portfolio Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Advantage Portfolio 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 Advantage Portfolio

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

The idea behind Guggenheim Managed Futures and Advantage Portfolio Class 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .