Correlation Between Financial Industries and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Financial Industries 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 Financial Industries and Gmo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Industries Fund and Gmo Global Equity, you can compare the effects of market volatilities on Financial Industries 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 Financial Industries with a short position of Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Industries and Gmo Global.
Diversification Opportunities for Financial Industries and Gmo Global
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Financial and Gmo is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries Fund 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 Financial Industries 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 Financial Industries Fund 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 Financial Industries i.e., Financial Industries and Gmo Global go up and down completely randomly.
Pair Corralation between Financial Industries and Gmo Global
Assuming the 90 days horizon Financial Industries Fund is expected to under-perform the Gmo Global. In addition to that, Financial Industries is 1.66 times more volatile than Gmo Global Equity. It trades about -0.01 of its total potential returns per unit of risk. Gmo Global Equity is currently generating about 0.12 per unit of volatility. If you would invest 2,997 in Gmo Global Equity on September 13, 2024 and sell it today you would earn a total of 32.00 from holding Gmo Global Equity or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Financial Industries Fund vs. Gmo Global Equity
Performance |
| Timeline |
| Financial Industries |
| Gmo Global Equity |
Financial Industries and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Industries and Gmo Global
The main advantage of trading using opposite Financial Industries and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Industries 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.| Financial Industries vs. Short Term Government Fund | Financial Industries vs. Lord Abbett Government | Financial Industries vs. Prudential Government Income | Financial Industries vs. Payden Government Fund |
| Gmo Global vs. Gmo E Plus | Gmo Global vs. Gmo Trust | Gmo Global vs. Gmo Treasury Fund | Gmo Global vs. Gmo Trust |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |