Correlation Between Gmo Small and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Gmo Small and Mainstay Balanced 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 Mainstay Balanced 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 Mainstay Balanced Fund, you can compare the effects of market volatilities on Gmo Small and Mainstay Balanced 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 Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Small and Mainstay Balanced.
Diversification Opportunities for Gmo Small and Mainstay Balanced
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gmo and Mainstay is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Small Cap and Mainstay Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Balanced 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 Mainstay Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Balanced has no effect on the direction of Gmo Small i.e., Gmo Small and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Gmo Small and Mainstay Balanced
Assuming the 90 days horizon Gmo Small Cap is expected to generate 2.87 times more return on investment than Mainstay Balanced. However, Gmo Small is 2.87 times more volatile than Mainstay Balanced Fund. It trades about 0.18 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.2 per unit of risk. If you would invest 2,601 in Gmo Small Cap on August 29, 2024 and sell it today you would earn a total of 151.00 from holding Gmo Small Cap or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gmo Small Cap vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Gmo Small Cap |
| Mainstay Balanced |
Gmo Small and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Small and Mainstay Balanced
The main advantage of trading using opposite Gmo Small and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Small position performs unexpectedly, Mainstay Balanced 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 Mainstay Balanced will offset losses from the drop in Mainstay Balanced's long position.| Gmo Small vs. Putnam Equity Income | Gmo Small vs. Putnam Growth Opportunities | Gmo Small vs. HUMANA INC | Gmo Small vs. Aquagold International |
| Mainstay Balanced vs. Baird Smallmid Cap | Mainstay Balanced vs. Gmo Small Cap | Mainstay Balanced vs. The Hartford Small | Mainstay Balanced vs. Ab Small Cap |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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