Correlation Between Aam/himco Short and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Aam/himco Short 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 Aam/himco Short and Gmo Global 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 Global Equity, you can compare the effects of market volatilities on Aam/himco Short 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 Aam/himco Short with a short position of Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam/himco Short and Gmo Global.
Diversification Opportunities for Aam/himco Short and Gmo Global
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Aam/himco and Gmo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aamhimco Short Duration 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 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 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 Aam/himco Short i.e., Aam/himco Short and Gmo Global go up and down completely randomly.
Pair Corralation between Aam/himco Short and Gmo Global
Assuming the 90 days horizon Aam/himco Short is expected to generate 16.15 times less return on investment than Gmo Global. But when comparing it to its historical volatility, Aamhimco Short Duration is 6.89 times less risky than Gmo Global. It trades about 0.05 of its potential returns per unit of risk. Gmo Global Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 2,841 in Gmo Global Equity on November 6, 2024 and sell it today you would earn a total of 45.00 from holding Gmo Global Equity or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aamhimco Short Duration vs. Gmo Global Equity
Performance |
| Timeline |
| Aamhimco Short Duration |
| Gmo Global Equity |
Aam/himco Short and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam/himco Short and Gmo Global
The main advantage of trading using opposite Aam/himco Short and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam/himco Short 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.| Aam/himco Short vs. Voya Real Estate | Aam/himco Short vs. Rreef Property Trust | Aam/himco Short vs. Nexpoint Real Estate | Aam/himco Short vs. Vy Clarion Real |
| Gmo Global vs. Angel Oak Multi Strategy | Gmo Global vs. Commodities Strategy Fund | Gmo Global vs. Transamerica Emerging Markets | Gmo Global vs. Franklin Emerging Market |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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