Correlation Between Gold Fields and Guggenheim Styleplus

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

By analyzing existing cross correlation between Gold Fields Ltd and Guggenheim Styleplus , you can compare the effects of market volatilities on Gold Fields and Guggenheim Styleplus 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 Gold Fields with a short position of Guggenheim Styleplus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Fields and Guggenheim Styleplus.

Diversification Opportunities for Gold Fields and Guggenheim Styleplus

0.51

Correlation Coefficient

Gold Fields  Guggenheim Styleplus

Very weak diversification

The 3 months correlation between Gold and Guggenheim is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Gold Fields Ltd and Guggenheim Styleplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Styleplus and Gold Fields 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 Gold Fields Ltd are associated (or correlated) with Guggenheim Styleplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Styleplus has no effect on the direction of Gold Fields i.e., Gold Fields and Guggenheim Styleplus go up and down completely randomly.

Pair Corralation between Gold Fields and Guggenheim Styleplus

Considering the 90-day investment horizon Gold Fields is expected to generate 3.49 times less return on investment than Guggenheim Styleplus. But when comparing it to its historical volatility, Gold Fields Ltd is 8.09 times less risky than Guggenheim Styleplus. It trades about 0.27 of its potential returns per unit of risk. Guggenheim Styleplus is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  766.00  in Guggenheim Styleplus on January 16, 2025 and sell it today you would earn a total of  1,267  from holding Guggenheim Styleplus or generate 165.4% return on investment over 90 days.

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

Gold Fields Ltd  vs.  Guggenheim Styleplus

Gold Fields

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gold Fields Ltd are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical and fundamental indicators, Gold Fields demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Guggenheim Styleplus

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Styleplus are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Guggenheim Styleplus showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gold Fields and Guggenheim Styleplus

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

The idea behind Gold Fields Ltd and Guggenheim Styleplus 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 Stocks Directory module to find actively traded stocks across global markets.