Correlation Between Gmo Small and Gmo Treasury
Can any of the company-specific risk be diversified away by investing in both Gmo Small and Gmo Treasury 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 Small and Gmo Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Small Cap and Gmo Treasury Fund, you can compare the effects of market volatilities on Gmo Small and Gmo Treasury 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 Small with a short position of Gmo Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Small and Gmo Treasury.
Diversification Opportunities for Gmo Small and Gmo Treasury
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gmo and Gmo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Small Cap and Gmo Treasury Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Treasury and Gmo Small 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 Small Cap are associated (or correlated) with Gmo Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Treasury has no effect on the direction of Gmo Small i.e., Gmo Small and Gmo Treasury go up and down completely randomly.
Pair Corralation between Gmo Small and Gmo Treasury
Assuming the 90 days horizon Gmo Small Cap is expected to generate 12.24 times more return on investment than Gmo Treasury. However, Gmo Small is 12.24 times more volatile than Gmo Treasury Fund. It trades about 0.08 of its potential returns per unit of risk. Gmo Treasury Fund is currently generating about 0.17 per unit of risk. If you would invest 1,829 in Gmo Small Cap on August 26, 2024 and sell it today you would earn a total of 825.00 from holding Gmo Small Cap or generate 45.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Small Cap vs. Gmo Treasury Fund
Performance |
| Timeline |
| Gmo Small Cap |
| Gmo Treasury |
Gmo Small and Gmo Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Small and Gmo Treasury
The main advantage of trading using opposite Gmo Small and Gmo Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Small position performs unexpectedly, Gmo Treasury 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 Treasury will offset losses from the drop in Gmo Treasury's long position.| Gmo Small vs. Gmo E Plus | Gmo Small vs. Gmo Trust | Gmo Small vs. Gmo Treasury Fund | Gmo Small vs. Gmo Trust |
| Gmo Treasury vs. Gmo E Plus | Gmo Treasury vs. Gmo Trust | Gmo Treasury vs. Gmo Trust | Gmo Treasury vs. Gmo Emerging Markets |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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