Correlation Between Guggenheim Strategic and Blackrock Muniholdings

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

Diversification Opportunities for Guggenheim Strategic and Blackrock Muniholdings

-0.08

Correlation Coefficient

Guggenheim Strategic  Blackrock Muniholdings

Good diversification

The 3 months correlation between Guggenheim and Blackrock is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Strategic Opportuni and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Guggenheim Strategic i.e., Guggenheim Strategic and Blackrock Muniholdings go up and down completely randomly.

Pair Corralation between Guggenheim Strategic and Blackrock Muniholdings

Considering the 90-day investment horizon Guggenheim Strategic Opportunities is expected to generate 2.21 times more return on investment than Blackrock Muniholdings. However, Guggenheim Strategic is 2.21 times more volatile than Blackrock Muniholdings Closed. It trades about 0.03 of its potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.05 per unit of risk. If you would invest  1,347  in Guggenheim Strategic Opportunities on February 24, 2024 and sell it today you would earn a total of  118.00  from holding Guggenheim Strategic Opportunities or generate 8.76% return on investment over 90 days.

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

Guggenheim Strategic Opportuni  vs.  Blackrock Muniholdings Closed

Guggenheim Strategic

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Strategic Opportunities are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Guggenheim Strategic may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Blackrock Muniholdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Muniholdings Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical indicators, Blackrock Muniholdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Guggenheim Strategic and Blackrock Muniholdings

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

The idea behind Guggenheim Strategic Opportunities and Blackrock Muniholdings Closed 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..