Correlation Between Alphabet and Guggenheim Macro

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Can any of the company-specific risk be diversified away by investing in both Alphabet and Guggenheim Macro 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 Alphabet and Guggenheim Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphabet Class C and Guggenheim Macro Opportunities, you can compare the effects of market volatilities on Alphabet and Guggenheim Macro 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 Alphabet with a short position of Guggenheim Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Guggenheim Macro.

Diversification Opportunities for Alphabet and Guggenheim Macro

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Alphabet and Guggenheim is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Class C and Guggenheim Macro Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Macro Opp and Alphabet 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 Alphabet Class C are associated (or correlated) with Guggenheim Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Macro Opp has no effect on the direction of Alphabet i.e., Alphabet and Guggenheim Macro go up and down completely randomly.

Pair Corralation between Alphabet and Guggenheim Macro

Given the investment horizon of 90 days Alphabet Class C is expected to generate 12.46 times more return on investment than Guggenheim Macro. However, Alphabet is 12.46 times more volatile than Guggenheim Macro Opportunities. It trades about 0.23 of its potential returns per unit of risk. Guggenheim Macro Opportunities is currently generating about 0.37 per unit of risk. If you would invest  14,010  in Alphabet Class C on December 29, 2023 and sell it today you would earn a total of  1,216  from holding Alphabet Class C or generate 8.68% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Alphabet Class C  vs.  Guggenheim Macro Opportunities

 Performance 
       Timeline  
Alphabet Class C 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Alphabet Class C are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Alphabet may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Guggenheim Macro Opp 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Macro Opportunities are ranked lower than 9 (%) 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.

Alphabet and Guggenheim Macro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Alphabet and Guggenheim Macro

The main advantage of trading using opposite Alphabet and Guggenheim Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet position performs unexpectedly, Guggenheim Macro 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 Guggenheim Macro will offset losses from the drop in Guggenheim Macro's long position.
The idea behind Alphabet Class C and Guggenheim Macro Opportunities 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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