Correlation Between Guggenheim Rbp and Aura Investments
Can any of the company-specific risk be diversified away by investing in both Guggenheim Rbp and Aura Investments 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 Rbp and Aura Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Rbp Large Cap and Aura Investments, you can compare the effects of market volatilities on Guggenheim Rbp and Aura Investments 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 Rbp with a short position of Aura Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Rbp and Aura Investments.
Diversification Opportunities for Guggenheim Rbp and Aura Investments
0.31 | Correlation Coefficient |
Weak diversification
The 21 months correlation between Guggenheim and Aura is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Rbp Large Cap and Aura Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aura Investments and Guggenheim Rbp 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 Rbp Large Cap are associated (or correlated) with Aura Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aura Investments has no effect on the direction of Guggenheim Rbp i.e., Guggenheim Rbp and Aura Investments go up and down completely randomly.
Pair Corralation between Guggenheim Rbp and Aura Investments
Assuming the 90 days horizon Guggenheim Rbp is expected to generate 10.3 times less return on investment than Aura Investments. But when comparing it to its historical volatility, Guggenheim Rbp Large Cap is 3.45 times less risky than Aura Investments. It trades about 0.03 of its potential returns per unit of risk. Aura Investments is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 62,835 in Aura Investments on January 25, 2024 and sell it today you would earn a total of 81,365 from holding Aura Investments or generate 129.49% return on investment over 90 days.
| Time Period | 21 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 78.52% |
| Values | Daily Returns |
Guggenheim Rbp Large Cap vs. Aura Investments
Performance |
| Timeline |
| Guggenheim Rbp Large |
| Aura Investments |
Guggenheim Rbp and Aura Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Rbp and Aura Investments
The main advantage of trading using opposite Guggenheim Rbp and Aura Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Rbp position performs unexpectedly, Aura Investments 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 Aura Investments will offset losses from the drop in Aura Investments' long position.The idea behind Guggenheim Rbp Large Cap and Aura Investments 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.
Check out your portfolio center.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |