Correlation Between Guggenheim Macro and Guggenheim Alpha

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

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

Diversification Opportunities for Guggenheim Macro and Guggenheim Alpha

0.07

Correlation Coefficient

Guggenheim Macro  Guggenheim Alpha

Significant diversification

The 3 months correlation between Guggenheim and Guggenheim is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Macro Opportunities and Guggenheim Alpha Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Alpha Opp and Guggenheim Macro 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 Macro Opportunities are associated (or correlated) with Guggenheim Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Alpha Opp has no effect on the direction of Guggenheim Macro i.e., Guggenheim Macro and Guggenheim Alpha go up and down completely randomly.

Pair Corralation between Guggenheim Macro and Guggenheim Alpha

Assuming the 90 days horizon Guggenheim Macro Opportunities is expected to generate 0.25 times more return on investment than Guggenheim Alpha. However, Guggenheim Macro Opportunities is 4.03 times less risky than Guggenheim Alpha. It trades about 0.29 of its potential returns per unit of risk. Guggenheim Alpha Opportunity is currently generating about 0.01 per unit of risk. If you would invest  2,434  in Guggenheim Macro Opportunities on May 7, 2025 and sell it today you would earn a total of  54.00  from holding Guggenheim Macro Opportunities or generate 2.22% return on investment over 90 days.

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

Guggenheim Macro Opportunities  vs.  Guggenheim Alpha Opportunity

Guggenheim Macro Opp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Macro Opportunities are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guggenheim Macro is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guggenheim Alpha Opp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guggenheim Alpha Opportunity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Guggenheim Alpha 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 Macro and Guggenheim Alpha

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

The idea behind Guggenheim Macro Opportunities and Guggenheim Alpha Opportunity 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.