Correlation Between Gmo High and Ubs Emerging
Can any of the company-specific risk be diversified away by investing in both Gmo High and Ubs Emerging 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 High and Ubs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Ubs Emerging Markets, you can compare the effects of market volatilities on Gmo High and Ubs Emerging 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 High with a short position of Ubs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Ubs Emerging.
Diversification Opportunities for Gmo High and Ubs Emerging
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gmo and Ubs is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Ubs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Emerging Markets and Gmo High 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 High Yield are associated (or correlated) with Ubs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Emerging Markets has no effect on the direction of Gmo High i.e., Gmo High and Ubs Emerging go up and down completely randomly.
Pair Corralation between Gmo High and Ubs Emerging
Assuming the 90 days horizon Gmo High is expected to generate 1.1 times less return on investment than Ubs Emerging. But when comparing it to its historical volatility, Gmo High Yield is 3.99 times less risky than Ubs Emerging. It trades about 0.16 of its potential returns per unit of risk. Ubs Emerging Markets is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 696.00 in Ubs Emerging Markets on November 9, 2024 and sell it today you would earn a total of 69.00 from holding Ubs Emerging Markets or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Ubs Emerging Markets
Performance |
| Timeline |
| Gmo High Yield |
| Ubs Emerging Markets |
Gmo High and Ubs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Ubs Emerging
The main advantage of trading using opposite Gmo High and Ubs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Ubs Emerging 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 Ubs Emerging will offset losses from the drop in Ubs Emerging's long position.| Gmo High vs. Davis Financial Fund | Gmo High vs. Vanguard Financials Index | Gmo High vs. Goldman Sachs Financial | Gmo High vs. Fidelity Advisor Financial |
| Ubs Emerging vs. Rreef Property Trust | Ubs Emerging vs. Short Real Estate | Ubs Emerging vs. Tiaa Cref Real Estate | Ubs Emerging vs. Nexpoint Real Estate |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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