Correlation Between Guggenheim Directional and Gugg Actv

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

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

Diversification Opportunities for Guggenheim Directional and Gugg Actv

0.83

Correlation Coefficient

Guggenheim Directional  Gugg Actv

Very poor diversification

The 3 months correlation between Guggenheim and Gugg is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Directional Allocat and Gugg Actv Invmt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gugg Actv Invmt and Guggenheim Directional 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 Directional Allocation are associated (or correlated) with Gugg Actv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gugg Actv Invmt has no effect on the direction of Guggenheim Directional i.e., Guggenheim Directional and Gugg Actv go up and down completely randomly.

Pair Corralation between Guggenheim Directional and Gugg Actv

Assuming the 90 days horizon Guggenheim Directional Allocation is expected to generate 2.3 times more return on investment than Gugg Actv. However, Guggenheim Directional is 2.3 times more volatile than Gugg Actv Invmt. It trades about 0.22 of its potential returns per unit of risk. Gugg Actv Invmt is currently generating about 0.14 per unit of risk. If you would invest  1,419  in Guggenheim Directional Allocation on May 7, 2025 and sell it today you would earn a total of  102.00  from holding Guggenheim Directional Allocation or generate 7.19% return on investment over 90 days.

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

Guggenheim Directional Allocat  vs.  Gugg Actv Invmt

Guggenheim Directional

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Directional Allocation are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Guggenheim Directional may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Gugg Actv Invmt

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gugg Actv Invmt are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gugg Actv 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 Directional and Gugg Actv

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

The idea behind Guggenheim Directional Allocation and Gugg Actv Invmt 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.