Correlation Between Global Gold and Great-west Loomis
Can any of the company-specific risk be diversified away by investing in both Global Gold and Great-west Loomis 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 Global Gold and Great-west Loomis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Great West Loomis Sayles, you can compare the effects of market volatilities on Global Gold and Great-west Loomis 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 Global Gold with a short position of Great-west Loomis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Great-west Loomis.
Diversification Opportunities for Global Gold and Great-west Loomis
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Global and Great-west is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis and Global Gold 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 Global Gold Fund are associated (or correlated) with Great-west Loomis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Global Gold i.e., Global Gold and Great-west Loomis go up and down completely randomly.
Pair Corralation between Global Gold and Great-west Loomis
Assuming the 90 days horizon Global Gold Fund is expected to under-perform the Great-west Loomis. In addition to that, Global Gold is 1.17 times more volatile than Great West Loomis Sayles. It trades about -0.18 of its total potential returns per unit of risk. Great West Loomis Sayles is currently generating about 0.29 per unit of volatility. If you would invest 3,782 in Great West Loomis Sayles on September 1, 2024 and sell it today you would earn a total of 396.00 from holding Great West Loomis Sayles or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Great West Loomis Sayles
Performance |
| Timeline |
| Global Gold Fund |
| Great West Loomis |
Global Gold and Great-west Loomis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Great-west Loomis
The main advantage of trading using opposite Global Gold and Great-west Loomis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Great-west Loomis 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 Great-west Loomis will offset losses from the drop in Great-west Loomis' long position.| Global Gold vs. Legg Mason Partners | Global Gold vs. Federated Ohio Municipal | Global Gold vs. Ambrus Core Bond | Global Gold vs. Oklahoma Municipal Fund |
| Great-west Loomis vs. Gabelli Gold Fund | Great-west Loomis vs. Global Gold Fund | Great-west Loomis vs. Invesco Gold Special | Great-west Loomis vs. International Investors Gold |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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