Correlation Between Gmo High and Gmo Trust
Can any of the company-specific risk be diversified away by investing in both Gmo High and Gmo Trust 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 Gmo Trust 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 Gmo Trust , you can compare the effects of market volatilities on Gmo High and Gmo Trust 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 Gmo Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Gmo Trust.
Diversification Opportunities for Gmo High and Gmo Trust
Good diversification
The 3 months correlation between Gmo and Gmo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Gmo Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Trust 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 Gmo Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Trust has no effect on the direction of Gmo High i.e., Gmo High and Gmo Trust go up and down completely randomly.
Pair Corralation between Gmo High and Gmo Trust
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.24 times more return on investment than Gmo Trust. However, Gmo High Yield is 4.12 times less risky than Gmo Trust. It trades about -0.2 of its potential returns per unit of risk. Gmo Trust is currently generating about -0.16 per unit of risk. If you would invest 1,678 in Gmo High Yield on October 15, 2024 and sell it today you would lose (13.00) from holding Gmo High Yield or give up 0.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Gmo Trust
Performance |
| Timeline |
| Gmo High Yield |
| Gmo Trust |
Gmo High and Gmo Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Gmo Trust
The main advantage of trading using opposite Gmo High and Gmo Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Gmo Trust 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 Trust will offset losses from the drop in Gmo Trust's long position.| Gmo High vs. Transamerica Short Term Bond | Gmo High vs. Cmg Ultra Short | Gmo High vs. Aamhimco Short Duration | Gmo High vs. Alpine Ultra Short |
| Gmo Trust vs. Gmo E Plus | Gmo Trust vs. Gmo Trust | Gmo Trust vs. Gmo Treasury Fund | Gmo Trust 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |