Correlation Between Gmo Small and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Gmo Small and Federated Strategic 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 Federated Strategic 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 Federated Strategic Income, you can compare the effects of market volatilities on Gmo Small and Federated Strategic 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 Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Small and Federated Strategic.
Diversification Opportunities for Gmo Small and Federated Strategic
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gmo and Federated is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Small Cap and Federated Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic 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 Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic has no effect on the direction of Gmo Small i.e., Gmo Small and Federated Strategic go up and down completely randomly.
Pair Corralation between Gmo Small and Federated Strategic
Assuming the 90 days horizon Gmo Small Cap is expected to generate 4.73 times more return on investment than Federated Strategic. However, Gmo Small is 4.73 times more volatile than Federated Strategic Income. It trades about 0.17 of its potential returns per unit of risk. Federated Strategic Income is currently generating about 0.07 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Small Cap vs. Federated Strategic Income
Performance |
| Timeline |
| Gmo Small Cap |
| Federated Strategic |
Gmo Small and Federated Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Small and Federated Strategic
The main advantage of trading using opposite Gmo Small and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Small position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic'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 |
| Federated Strategic vs. Champlain Small | Federated Strategic vs. Baird Smallmid Cap | Federated Strategic vs. Artisan Small Cap | Federated Strategic vs. Gmo 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |