Correlation Between Guggenheim High and Clearbridge Mid

Can any of the company-specific risk be diversified away by investing in both Guggenheim High and Clearbridge Mid 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 High and Clearbridge Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Guggenheim High Yield and Clearbridge Mid Cap, you can compare the effects of market volatilities on Guggenheim High and Clearbridge Mid 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 High with a short position of Clearbridge Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and Clearbridge Mid.

Diversification Opportunities for Guggenheim High and Clearbridge Mid

-0.04

Correlation Coefficient

Guggenheim High  Clearbridge Mid

Good diversification

The 3 months correlation between Guggenheim and Clearbridge is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield and Clearbridge Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Mid Cap and Guggenheim High 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 High Yield are associated (or correlated) with Clearbridge Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Mid Cap has no effect on the direction of Guggenheim High i.e., Guggenheim High and Clearbridge Mid go up and down completely randomly.

Pair Corralation between Guggenheim High and Clearbridge Mid

Assuming the 90 days horizon Guggenheim High Yield is expected to generate 0.09 times more return on investment than Clearbridge Mid. However, Guggenheim High Yield is 11.16 times less risky than Clearbridge Mid. It trades about 0.06 of its potential returns per unit of risk. Clearbridge Mid Cap is currently generating about -0.15 per unit of risk. If you would invest  1,002  in Guggenheim High Yield on December 2, 2024 and sell it today you would earn a total of  6.00  from holding Guggenheim High Yield or generate 0.6% return on investment over 90 days.

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

Guggenheim High Yield  vs.  Clearbridge Mid Cap

Guggenheim High Yield

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim High Yield are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guggenheim High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clearbridge Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clearbridge Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Guggenheim High and Clearbridge Mid

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

The idea behind Guggenheim High Yield and Clearbridge Mid Cap 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..