Correlation Between Absolute Convertible and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible and Gmo Global 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 Absolute Convertible and Gmo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Gmo Global Equity, you can compare the effects of market volatilities on Absolute Convertible and Gmo Global 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 Absolute Convertible with a short position of Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Gmo Global.
Diversification Opportunities for Absolute Convertible and Gmo Global
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Absolute and Gmo is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Gmo Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Equity and Absolute Convertible 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 Absolute Convertible Arbitrage are associated (or correlated) with Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Equity has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Gmo Global go up and down completely randomly.
Pair Corralation between Absolute Convertible and Gmo Global
Assuming the 90 days horizon Absolute Convertible is expected to generate 3.56 times less return on investment than Gmo Global. But when comparing it to its historical volatility, Absolute Convertible Arbitrage is 31.07 times less risky than Gmo Global. It trades about 0.63 of its potential returns per unit of risk. Gmo Global Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,843 in Gmo Global Equity on October 26, 2024 and sell it today you would earn a total of 67.00 from holding Gmo Global Equity or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Gmo Global Equity
Performance |
| Timeline |
| Absolute Convertible |
| Gmo Global Equity |
Absolute Convertible and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Gmo Global
The main advantage of trading using opposite Absolute Convertible and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible position performs unexpectedly, Gmo Global 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 Gmo Global will offset losses from the drop in Gmo Global's long position.| Absolute Convertible vs. Rbc Global Opportunities | Absolute Convertible vs. Dws Global Macro | Absolute Convertible vs. Ms Global Fixed | Absolute Convertible vs. Kinetics Global Fund |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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