Correlation Between Guggenheim Risk and Nuveen Real

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

By analyzing existing cross correlation between Guggenheim Risk Managed and Nuveen Real Estate, you can compare the effects of market volatilities on Guggenheim Risk and Nuveen Real 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 Risk with a short position of Nuveen Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Risk and Nuveen Real.

Diversification Opportunities for Guggenheim Risk and Nuveen Real

0.73

Correlation Coefficient

Guggenheim Risk  Nuveen Real

Poor diversification

The 3 months correlation between Guggenheim and Nuveen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Risk Managed and Nuveen Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Real Estate and Guggenheim Risk 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 Risk Managed are associated (or correlated) with Nuveen Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Real Estate has no effect on the direction of Guggenheim Risk i.e., Guggenheim Risk and Nuveen Real go up and down completely randomly.

Pair Corralation between Guggenheim Risk and Nuveen Real

Assuming the 90 days horizon Guggenheim Risk is expected to generate 1.09 times less return on investment than Nuveen Real. But when comparing it to its historical volatility, Guggenheim Risk Managed is 1.05 times less risky than Nuveen Real. It trades about 0.08 of its potential returns per unit of risk. Nuveen Real Estate is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,314  in Nuveen Real Estate on September 14, 2024 and sell it today you would earn a total of  299.00  from holding Nuveen Real Estate or generate 22.75% return on investment over 90 days.

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

Guggenheim Risk Managed  vs.  Nuveen Real Estate

Guggenheim Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Guggenheim Risk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Real 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 Risk and Nuveen Real

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

The idea behind Guggenheim Risk Managed and Nuveen Real Estate 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.