Correlation Between Guggenheim Strategic and Eaton Vance

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

By analyzing existing cross correlation between Guggenheim Strategic Opportunities and Eaton Vance Tax, you can compare the effects of market volatilities on Guggenheim Strategic and Eaton Vance 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 Strategic with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Strategic and Eaton Vance.

Diversification Opportunities for Guggenheim Strategic and Eaton Vance

0.7

Correlation Coefficient

Guggenheim Strategic  Eaton Vance

Poor diversification

The 3 months correlation between Guggenheim and Eaton is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Eaton Vance Tax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Tax and Guggenheim Strategic 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 Strategic Opportunities are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Tax has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Eaton Vance go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and Eaton Vance

Considering the 90-day investment horizon Guggenheim Strategic is expected to generate 2.09 times less return on investment than Eaton Vance. In addition to that, Guggenheim Strategic is 1.13 times more volatile than Eaton Vance Tax. It trades about 0.02 of its total potential returns per unit of risk. Eaton Vance Tax is currently generating about 0.05 per unit of volatility. If you would invest  1,055  in Eaton Vance Tax on February 23, 2024 and sell it today you would earn a total of  291.00  from holding Eaton Vance Tax or generate 27.58% return on investment over 90 days.

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

Guggenheim Strategic Opportuni  vs.  Eaton Vance Tax

Guggenheim Strategic

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Guggenheim Strategic may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Eaton Vance Tax

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eaton Vance Tax are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Eaton Vance 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 Strategic and Eaton Vance

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

The idea behind Guggenheim Strategic Opportunities and Eaton Vance Tax 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.