Correlation Between Guggenheim Macro and IUSA

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

Diversification Opportunities for Guggenheim Macro and IUSA

0.13

Correlation Coefficient

Guggenheim Macro  IUSA

Average diversification

The 3 months correlation between Guggenheim and IUSA is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Macro Opportunities and IUSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IUSA 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 IUSA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IUSA has no effect on the direction of Guggenheim Macro i.e., Guggenheim Macro and IUSA go up and down completely randomly.

Pair Corralation between Guggenheim Macro and IUSA

If you would invest  2,302  in Guggenheim Macro Opportunities on January 25, 2024 and sell it today you would earn a total of  113.00  from holding Guggenheim Macro Opportunities or generate 4.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.97%
Values	Daily Returns

Guggenheim Macro Opportunities  vs.  IUSA

Guggenheim Macro Opp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Macro Opportunities are ranked lower than 8 (%) 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.

IUSA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IUSA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, IUSA 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 IUSA

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

The idea behind Guggenheim Macro Opportunities and IUSA 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.