Correlation Between Guggenheim Macro and Blackrock Strategic

Can any of the company-specific risk be diversified away by investing in both Guggenheim Macro and Blackrock Strategic 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 Blackrock Strategic 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 Blackrock Strategic Income, you can compare the effects of market volatilities on Guggenheim Macro and Blackrock Strategic 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 Blackrock Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Macro and Blackrock Strategic.

Diversification Opportunities for Guggenheim Macro and Blackrock Strategic

0.59

Correlation Coefficient

Guggenheim Macro  Blackrock Strategic

Very weak diversification

The 3 months correlation between Guggenheim and Blackrock is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Macro Opportunities and Blackrock Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Strategic 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 Blackrock Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Strategic has no effect on the direction of Guggenheim Macro i.e., Guggenheim Macro and Blackrock Strategic go up and down completely randomly.

Pair Corralation between Guggenheim Macro and Blackrock Strategic

Assuming the 90 days horizon Guggenheim Macro Opportunities is expected to generate 0.58 times more return on investment than Blackrock Strategic. However, Guggenheim Macro Opportunities is 1.73 times less risky than Blackrock Strategic. It trades about -0.08 of its potential returns per unit of risk. Blackrock Strategic Income is currently generating about -0.18 per unit of risk. If you would invest  2,419  in Guggenheim Macro Opportunities on January 25, 2024 and sell it today you would lose (6.00) from holding Guggenheim Macro Opportunities or give up 0.25% of portfolio value over 90 days.

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

Guggenheim Macro Opportunities  vs.  Blackrock Strategic Income

Guggenheim Macro Opp

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Macro Opportunities are ranked lower than 7 (%) 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.

Blackrock Strategic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Strategic Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Blackrock Strategic 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 Blackrock Strategic

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

The idea behind Guggenheim Macro Opportunities and Blackrock Strategic Income 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.