Correlation Between Gmo Benchmark-free and Gmo International
Can any of the company-specific risk be diversified away by investing in both Gmo Benchmark-free and Gmo International 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 Benchmark-free and Gmo International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Benchmark Free Fund and Gmo International Opportunistic, you can compare the effects of market volatilities on Gmo Benchmark-free and Gmo International 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 Benchmark-free with a short position of Gmo International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Benchmark-free and Gmo International.
Diversification Opportunities for Gmo Benchmark-free and Gmo International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gmo and Gmo is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Benchmark Free Fund and Gmo International Opportunisti in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo International and Gmo Benchmark-free 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 Benchmark Free Fund are associated (or correlated) with Gmo International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo International has no effect on the direction of Gmo Benchmark-free i.e., Gmo Benchmark-free and Gmo International go up and down completely randomly.
Pair Corralation between Gmo Benchmark-free and Gmo International
Assuming the 90 days horizon Gmo Benchmark Free Fund is expected to generate 0.6 times more return on investment than Gmo International. However, Gmo Benchmark Free Fund is 1.68 times less risky than Gmo International. It trades about -0.09 of its potential returns per unit of risk. Gmo International Opportunistic is currently generating about -0.11 per unit of risk. If you would invest 1,963 in Gmo Benchmark Free Fund on September 3, 2024 and sell it today you would lose (19.00) from holding Gmo Benchmark Free Fund or give up 0.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Benchmark Free Fund vs. Gmo International Opportunisti
Performance |
| Timeline |
| Gmo Benchmark Free |
| Gmo International |
Gmo Benchmark-free and Gmo International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Benchmark-free and Gmo International
The main advantage of trading using opposite Gmo Benchmark-free and Gmo International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Benchmark-free position performs unexpectedly, Gmo International 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 International will offset losses from the drop in Gmo International's long position.| Gmo Benchmark-free vs. Ab Bond Inflation | Gmo Benchmark-free vs. Lord Abbett Inflation | Gmo Benchmark-free vs. Tiaa Cref Inflation Linked Bond | Gmo Benchmark-free vs. Arrow Managed Futures |
| Gmo International vs. Tax Managed Mid Small | Gmo International vs. Principal Lifetime Hybrid | Gmo International vs. Fuller Thaler Behavioral | Gmo International vs. Jhancock Diversified Macro |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |