Correlation Between Gmo Global and Wilmington International
Can any of the company-specific risk be diversified away by investing in both Gmo Global and Wilmington 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 Global and Wilmington International 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 Wilmington International Fund, you can compare the effects of market volatilities on Gmo Global and Wilmington 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 Global with a short position of Wilmington International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Global and Wilmington International.
Diversification Opportunities for Gmo Global and Wilmington International
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Wilmington is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Global Equity and Wilmington International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington International 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 Wilmington International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington International has no effect on the direction of Gmo Global i.e., Gmo Global and Wilmington International go up and down completely randomly.
Pair Corralation between Gmo Global and Wilmington International
Assuming the 90 days horizon Gmo Global Equity is expected to generate 0.87 times more return on investment than Wilmington International. However, Gmo Global Equity is 1.15 times less risky than Wilmington International. It trades about 0.03 of its potential returns per unit of risk. Wilmington International Fund is currently generating about -0.02 per unit of risk. If you would invest 3,036 in Gmo Global Equity on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Gmo Global Equity or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Global Equity vs. Wilmington International Fund
Performance |
| Timeline |
| Gmo Global Equity |
| Wilmington International |
Gmo Global and Wilmington International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Global and Wilmington International
The main advantage of trading using opposite Gmo Global and Wilmington International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Global position performs unexpectedly, Wilmington 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 Wilmington International will offset losses from the drop in Wilmington International's long position.| Gmo Global vs. Aig Government Money | Gmo Global vs. Franklin Adjustable Government | Gmo Global vs. Sit Government Securities | Gmo Global vs. Goldman Sachs Government |
| Wilmington International vs. Gmo Global Equity | Wilmington International vs. Huber Capital Equity | Wilmington International vs. Rbc Global Equity | Wilmington International vs. Artisan Select Equity |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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