Correlation Between Guggenheim Managed and 1290 Multi

Can any of the company-specific risk be diversified away by investing in both Guggenheim Managed and 1290 Multi 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 1290 Multi 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 1290 Multi Alternative Strategies, you can compare the effects of market volatilities on Guggenheim Managed and 1290 Multi 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 1290 Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Managed and 1290 Multi.

Diversification Opportunities for Guggenheim Managed and 1290 Multi

-0.17

Correlation Coefficient

Guggenheim Managed  1290 Multi

Good diversification

The 3 months correlation between Guggenheim and 1290 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and 1290 Multi Alternative Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1290 Multi Alternative 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 1290 Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1290 Multi Alternative has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and 1290 Multi go up and down completely randomly.

Pair Corralation between Guggenheim Managed and 1290 Multi

Assuming the 90 days horizon Guggenheim Managed Futures is expected to generate 1.55 times more return on investment than 1290 Multi. However, Guggenheim Managed is 1.55 times more volatile than 1290 Multi Alternative Strategies. It trades about 0.17 of its potential returns per unit of risk. 1290 Multi Alternative Strategies is currently generating about 0.02 per unit of risk. If you would invest  1,963  in Guggenheim Managed Futures on October 25, 2024 and sell it today you would earn a total of  78.00  from holding Guggenheim Managed Futures or generate 3.97% 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.  1290 Multi Alternative Strateg

Guggenheim Managed

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Managed Futures are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. 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.

1290 Multi Alternative

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 1290 Multi Alternative Strategies are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, 1290 Multi 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 1290 Multi

The main advantage of trading using opposite Guggenheim Managed and 1290 Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Managed position performs unexpectedly, 1290 Multi 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 1290 Multi will offset losses from the drop in 1290 Multi's long position.

The idea behind Guggenheim Managed Futures and 1290 Multi Alternative Strategies 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.