Correlation Between Gmo Global and Siit Equity
Can any of the company-specific risk be diversified away by investing in both Gmo Global and Siit Equity 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 Siit Equity 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 Siit Equity Factor, you can compare the effects of market volatilities on Gmo Global and Siit Equity 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 Siit Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Global and Siit Equity.
Diversification Opportunities for Gmo Global and Siit Equity
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gmo and Siit is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Global Equity and Siit Equity Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Equity Factor 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 Siit Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Equity Factor has no effect on the direction of Gmo Global i.e., Gmo Global and Siit Equity go up and down completely randomly.
Pair Corralation between Gmo Global and Siit Equity
Assuming the 90 days horizon Gmo Global is expected to generate 1.18 times less return on investment than Siit Equity. But when comparing it to its historical volatility, Gmo Global Equity is 1.04 times less risky than Siit Equity. It trades about 0.06 of its potential returns per unit of risk. Siit Equity Factor is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,284 in Siit Equity Factor on November 3, 2024 and sell it today you would earn a total of 212.00 from holding Siit Equity Factor or generate 16.51% 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. Siit Equity Factor
Performance |
| Timeline |
| Gmo Global Equity |
| Siit Equity Factor |
Gmo Global and Siit Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Global and Siit Equity
The main advantage of trading using opposite Gmo Global and Siit Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Global position performs unexpectedly, Siit Equity 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 Siit Equity will offset losses from the drop in Siit Equity's long position.| Gmo Global vs. Small Pany Growth | Gmo Global vs. Ab Small Cap | Gmo Global vs. Praxis Small Cap | Gmo Global vs. Legg Mason Partners |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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