Correlation Between Gmo Global and Federated Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Gmo Global and Federated Pennsylvania 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 Gmo Global and Federated Pennsylvania into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Global Equity and Federated Pennsylvania Municipal, you can compare the effects of market volatilities on Gmo Global and Federated Pennsylvania 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 Gmo Global with a short position of Federated Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Global and Federated Pennsylvania.
Diversification Opportunities for Gmo Global and Federated Pennsylvania
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GMO and Federated is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Global Equity and Federated Pennsylvania Municip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Pennsylvania and Gmo Global 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 Gmo Global Equity are associated (or correlated) with Federated Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Pennsylvania has no effect on the direction of Gmo Global i.e., Gmo Global and Federated Pennsylvania go up and down completely randomly.
Pair Corralation between Gmo Global and Federated Pennsylvania
Assuming the 90 days horizon Gmo Global Equity is expected to generate 10.91 times more return on investment than Federated Pennsylvania. However, Gmo Global is 10.91 times more volatile than Federated Pennsylvania Municipal. It trades about 0.04 of its potential returns per unit of risk. Federated Pennsylvania Municipal is currently generating about -0.09 per unit of risk. If you would invest 2,823 in Gmo Global Equity on October 22, 2024 and sell it today you would earn a total of 31.00 from holding Gmo Global Equity or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Global Equity vs. Federated Pennsylvania Municip
Performance |
| Timeline |
| Gmo Global Equity |
| Federated Pennsylvania |
Gmo Global and Federated Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Global and Federated Pennsylvania
The main advantage of trading using opposite Gmo Global and Federated Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Global position performs unexpectedly, Federated Pennsylvania 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 Federated Pennsylvania will offset losses from the drop in Federated Pennsylvania's long position.| Gmo Global vs. Msift High Yield | Gmo Global vs. Guggenheim High Yield | Gmo Global vs. Siit High Yield | Gmo Global vs. Simt High Yield |
| Federated Pennsylvania vs. Dreyfusstandish Global Fixed | Federated Pennsylvania vs. Gmo Global Equity | Federated Pennsylvania vs. Small Cap Equity | Federated Pennsylvania vs. T Rowe Price |
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
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |