Correlation Between City National and Guggenheim High
Can any of the company-specific risk be diversified away by investing in both City National and Guggenheim High 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 City National and Guggenheim High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Guggenheim High Yield, you can compare the effects of market volatilities on City National and Guggenheim High 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 City National with a short position of Guggenheim High. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Guggenheim High.
Diversification Opportunities for City National and Guggenheim High
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between City and Guggenheim is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Guggenheim High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim High Yield and City National 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 City National Rochdale are associated (or correlated) with Guggenheim High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim High Yield has no effect on the direction of City National i.e., City National and Guggenheim High go up and down completely randomly.
Pair Corralation between City National and Guggenheim High
Assuming the 90 days horizon City National Rochdale is expected to generate 1.48 times more return on investment than Guggenheim High. However, City National is 1.48 times more volatile than Guggenheim High Yield. It trades about 0.05 of its potential returns per unit of risk. Guggenheim High Yield is currently generating about 0.06 per unit of risk. If you would invest 1,950 in City National Rochdale on February 14, 2024 and sell it today you would earn a total of 13.00 from holding City National Rochdale or generate 0.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
City National Rochdale vs. Guggenheim High Yield
Performance |
Timeline |
City National Rochdale |
Guggenheim High Yield |
City National and Guggenheim High Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with City National and Guggenheim High
The main advantage of trading using opposite City National and Guggenheim High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Guggenheim High 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 High will offset losses from the drop in Guggenheim High's long position.City National vs. Fidelity New Markets | City National vs. Fidelity Total Bond | City National vs. Fidelity Balanced Fund | City National vs. Fidelity Real Estate |
Check out your portfolio center.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.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |