Correlation Between Guggenheim High and Tiaa Cref

Can any of the company-specific risk be diversified away by investing in both Guggenheim High and Tiaa Cref 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 Tiaa Cref 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 Tiaa Cref Smallmid Cap Equity, you can compare the effects of market volatilities on Guggenheim High and Tiaa Cref 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 Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim High and Tiaa Cref.

Diversification Opportunities for Guggenheim High and Tiaa Cref

0.63

Correlation Coefficient

Guggenheim High  Tiaa Cref

Poor diversification

The 3 months correlation between GUGGENHEIM and Tiaa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim High Yield and Tiaa Cref Smallmid Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Smallmid 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 Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Smallmid has no effect on the direction of Guggenheim High i.e., Guggenheim High and Tiaa Cref go up and down completely randomly.

Pair Corralation between Guggenheim High and Tiaa Cref

Assuming the 90 days horizon Guggenheim High is expected to generate 13.01 times less return on investment than Tiaa Cref. But when comparing it to its historical volatility, Guggenheim High Yield is 7.64 times less risky than Tiaa Cref. It trades about 0.13 of its potential returns per unit of risk. Tiaa Cref Smallmid Cap Equity is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1,548  in Tiaa Cref Smallmid Cap Equity on September 4, 2024 and sell it today you would earn a total of  237.00  from holding Tiaa Cref Smallmid Cap Equity or generate 15.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Guggenheim High Yield  vs.  Tiaa Cref Smallmid Cap Equity

Guggenheim High Yield

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim High Yield are ranked lower than 10 (%) 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.

Tiaa Cref Smallmid

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref Smallmid Cap Equity are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Tiaa Cref showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guggenheim High and Tiaa Cref

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

The idea behind Guggenheim High Yield and Tiaa Cref Smallmid Cap Equity 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.