Correlation Between Sixth Street and Guggenheim Strategic

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

By analyzing existing cross correlation between Sixth Street Specialty and Guggenheim Strategic Opportunities, you can compare the effects of market volatilities on Sixth Street and Guggenheim Strategic 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 Sixth Street with a short position of Guggenheim Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixth Street and Guggenheim Strategic.

Diversification Opportunities for Sixth Street and Guggenheim Strategic

0.82

Correlation Coefficient

Sixth Street  Guggenheim Strategic

Very poor diversification

The 3 months correlation between Sixth and Guggenheim is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Sixth Street Specialty and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Strategic and Sixth Street 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 Sixth Street Specialty are associated (or correlated) with Guggenheim Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Strategic has no effect on the direction of Sixth Street i.e., Sixth Street and Guggenheim Strategic go up and down completely randomly.

Pair Corralation between Sixth Street and Guggenheim Strategic

Given the investment horizon of 90 days Sixth Street Specialty is expected to generate 1.6 times more return on investment than Guggenheim Strategic. However, Sixth Street is 1.6 times more volatile than Guggenheim Strategic Opportunities. It trades about 0.13 of its potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.17 per unit of risk. If you would invest  2,079  in Sixth Street Specialty on December 29, 2024 and sell it today you would earn a total of  155.00  from holding Sixth Street Specialty or generate 7.46% return on investment over 90 days.

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

Sixth Street Specialty  vs.  Guggenheim Strategic Opportuni

Sixth Street Specialty

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sixth Street Specialty are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, Sixth Street may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Guggenheim Strategic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guggenheim Strategic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sixth Street and Guggenheim Strategic

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

The idea behind Sixth Street Specialty and Guggenheim Strategic Opportunities 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.