Correlation Between Aam/himco Short and Gmo High
Can any of the company-specific risk be diversified away by investing in both Aam/himco Short and Gmo 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 Aam/himco Short and Gmo High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aamhimco Short Duration and Gmo High Yield, you can compare the effects of market volatilities on Aam/himco Short and Gmo 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 Aam/himco Short with a short position of Gmo High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam/himco Short and Gmo High.
Diversification Opportunities for Aam/himco Short and Gmo High
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aam/himco and Gmo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Aamhimco Short Duration and Gmo High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo High Yield and Aam/himco Short 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 Aamhimco Short Duration are associated (or correlated) with Gmo High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo High Yield has no effect on the direction of Aam/himco Short i.e., Aam/himco Short and Gmo High go up and down completely randomly.
Pair Corralation between Aam/himco Short and Gmo High
Assuming the 90 days horizon Aam/himco Short is expected to generate 12.44 times less return on investment than Gmo High. But when comparing it to its historical volatility, Aamhimco Short Duration is 2.0 times less risky than Gmo High. It trades about 0.05 of its potential returns per unit of risk. Gmo High Yield is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,670 in Gmo High Yield on November 3, 2024 and sell it today you would earn a total of 21.00 from holding Gmo High Yield or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aamhimco Short Duration vs. Gmo High Yield
Performance |
| Timeline |
| Aamhimco Short Duration |
| Gmo High Yield |
Aam/himco Short and Gmo High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam/himco Short and Gmo High
The main advantage of trading using opposite Aam/himco Short and Gmo High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam/himco Short position performs unexpectedly, Gmo 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 Gmo High will offset losses from the drop in Gmo High's long position.| Aam/himco Short vs. Barings Emerging Markets | Aam/himco Short vs. Growth Strategy Fund | Aam/himco Short vs. Dodge Cox Emerging | Aam/himco Short vs. Artisan Developing World |
| Gmo High vs. Gmo International Equity | Gmo High vs. Artisan Select Equity | Gmo High vs. Small Cap Equity | Gmo High vs. Qs Global Equity |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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