Correlation Between Cornerstone Strategic and Guggenheim Strategic

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

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

Diversification Opportunities for Cornerstone Strategic and Guggenheim Strategic

0.64

Correlation Coefficient

Cornerstone Strategic  Guggenheim Strategic

Poor diversification

The 3 months correlation between Cornerstone and Guggenheim is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Value and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Strategic and Cornerstone 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 Cornerstone Strategic Value are associated (or correlated) with Guggenheim Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Strategic has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Guggenheim Strategic go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Guggenheim Strategic

Considering the 90-day investment horizon Cornerstone Strategic Value is expected to under-perform the Guggenheim Strategic. In addition to that, Cornerstone Strategic is 1.13 times more volatile than Guggenheim Strategic Opportunities. It trades about -0.01 of its total potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.04 per unit of volatility. If you would invest  1,184  in Guggenheim Strategic Opportunities on March 23, 2025 and sell it today you would earn a total of  273.00  from holding Guggenheim Strategic Opportunities or generate 23.06% return on investment over 90 days.

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

Cornerstone Strategic Value  vs.  Guggenheim Strategic Opportuni

Cornerstone Strategic

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Value are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy essential indicators, Cornerstone Strategic is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Guggenheim Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guggenheim Strategic Opportunities has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Guggenheim Strategic is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cornerstone Strategic and Guggenheim Strategic

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

The idea behind Cornerstone Strategic Value and Guggenheim Strategic 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.