Correlation Between Guggenheim Investment and Nuveen High

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

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

Diversification Opportunities for Guggenheim Investment and Nuveen High

0.65

Correlation Coefficient

Guggenheim Investment  Nuveen High

Poor diversification

The 3 months correlation between Guggenheim and Nuveen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Investment Grade and Nuveen High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Yield and Guggenheim Investment 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 Investment Grade are associated (or correlated) with Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Yield has no effect on the direction of Guggenheim Investment i.e., Guggenheim Investment and Nuveen High go up and down completely randomly.

Pair Corralation between Guggenheim Investment and Nuveen High

Assuming the 90 days horizon Guggenheim Investment Grade is expected to under-perform the Nuveen High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guggenheim Investment Grade is 1.36 times less risky than Nuveen High. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Nuveen High Yield is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,484  in Nuveen High Yield on October 12, 2024 and sell it today you would lose (14.00) from holding Nuveen High Yield or give up 0.94% of portfolio value over 90 days.

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

Guggenheim Investment Grade  vs.  Nuveen High Yield

Guggenheim Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Investment Grade has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Guggenheim Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen High Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Nuveen High 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 Investment and Nuveen High

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

The idea behind Guggenheim Investment Grade and Nuveen High Yield 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.