Correlation Between Guggenheim Active and BlackRock Limited

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

By analyzing existing cross correlation between Guggenheim Active Allocation and BlackRock Limited Duration, you can compare the effects of market volatilities on Guggenheim Active and BlackRock Limited 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 Active with a short position of BlackRock Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Active and BlackRock Limited.

Diversification Opportunities for Guggenheim Active and BlackRock Limited

0.88

Correlation Coefficient

Guggenheim Active  BlackRock Limited

Very poor diversification

The 3 months correlation between Guggenheim and BlackRock is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Active Allocation and BlackRock Limited Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Limited and Guggenheim Active 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 Active Allocation are associated (or correlated) with BlackRock Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Limited has no effect on the direction of Guggenheim Active i.e., Guggenheim Active and BlackRock Limited go up and down completely randomly.

Pair Corralation between Guggenheim Active and BlackRock Limited

Considering the 90-day investment horizon Guggenheim Active is expected to generate 1.07 times less return on investment than BlackRock Limited. In addition to that, Guggenheim Active is 1.8 times more volatile than BlackRock Limited Duration. It trades about 0.1 of its total potential returns per unit of risk. BlackRock Limited Duration is currently generating about 0.2 per unit of volatility. If you would invest  1,360  in BlackRock Limited Duration on May 7, 2025 and sell it today you would earn a total of  57.00  from holding BlackRock Limited Duration or generate 4.19% return on investment over 90 days.

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

Guggenheim Active Allocation  vs.  BlackRock Limited Duration

Guggenheim Active

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Active Allocation are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Guggenheim Active is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

BlackRock Limited

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Limited Duration are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable essential indicators, BlackRock Limited is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Guggenheim Active and BlackRock Limited

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

The idea behind Guggenheim Active Allocation and BlackRock Limited Duration 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.