Correlation Between Guggenheim Strategic and TRAVEL LEISURE

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

By analyzing existing cross correlation between Guggenheim Strategic Opportunities and TRAVEL LEISURE DL 01, you can compare the effects of market volatilities on Guggenheim Strategic and TRAVEL LEISURE 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 Strategic with a short position of TRAVEL LEISURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and TRAVEL LEISURE.

Diversification Opportunities for Guggenheim Strategic and TRAVEL LEISURE

0.82

Correlation Coefficient

Guggenheim Strategic  TRAVEL LEISURE

Very poor diversification

The 3 months correlation between Guggenheim and TRAVEL is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and TRAVEL LEISURE DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRAVEL LEISURE DL and Guggenheim Strategic 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 Strategic Opportunities are associated (or correlated) with TRAVEL LEISURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRAVEL LEISURE DL has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and TRAVEL LEISURE go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and TRAVEL LEISURE

Considering the 90-day investment horizon Guggenheim Strategic is expected to generate 3.84 times less return on investment than TRAVEL LEISURE. But when comparing it to its historical volatility, Guggenheim Strategic Opportunities is 3.94 times less risky than TRAVEL LEISURE. It trades about 0.19 of its potential returns per unit of risk. TRAVEL LEISURE DL 01 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  4,074  in TRAVEL LEISURE DL 01 on May 5, 2025 and sell it today you would earn a total of  1,026  from holding TRAVEL LEISURE DL 01 or generate 25.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Guggenheim Strategic Opportuni  vs.  TRAVEL LEISURE DL 01

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 14 (%) 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.

TRAVEL LEISURE DL

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TRAVEL LEISURE DL 01 are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TRAVEL LEISURE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Guggenheim Strategic and TRAVEL LEISURE

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

The idea behind Guggenheim Strategic Opportunities and TRAVEL LEISURE DL 01 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.