Correlation Between Gurtin California and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Gurtin California and Transamerica Intermediate 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 Gurtin California and Transamerica Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gurtin California Muni and Transamerica Intermediate Muni, you can compare the effects of market volatilities on Gurtin California and Transamerica Intermediate 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 Gurtin California with a short position of Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gurtin California and Transamerica Intermediate.
Diversification Opportunities for Gurtin California and Transamerica Intermediate
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gurtin and Transamerica is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Gurtin California Muni and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate and Gurtin California 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 Gurtin California Muni are associated (or correlated) with Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Gurtin California i.e., Gurtin California and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Gurtin California and Transamerica Intermediate
Assuming the 90 days horizon Gurtin California is expected to generate 1.37 times less return on investment than Transamerica Intermediate. But when comparing it to its historical volatility, Gurtin California Muni is 1.65 times less risky than Transamerica Intermediate. It trades about 0.05 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,017 in Transamerica Intermediate Muni on October 11, 2024 and sell it today you would earn a total of 50.00 from holding Transamerica Intermediate Muni or generate 4.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gurtin California Muni vs. Transamerica Intermediate Muni
Performance |
| Timeline |
| Gurtin California Muni |
| Transamerica Intermediate |
Gurtin California and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gurtin California and Transamerica Intermediate
The main advantage of trading using opposite Gurtin California and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gurtin California position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Gurtin California vs. Oppenheimer Gold Special | Gurtin California vs. Short Precious Metals | Gurtin California vs. Great West Goldman Sachs | Gurtin California vs. Franklin Gold Precious |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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