Correlation Between Gmo Emerging and Mainstay Balanced
Can any of the company-specific risk be diversified away by investing in both Gmo Emerging 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 Emerging 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 Emerging Country and Mainstay Balanced Fund, you can compare the effects of market volatilities on Gmo Emerging 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 Emerging with a short position of Mainstay Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Emerging and Mainstay Balanced.
Diversification Opportunities for Gmo Emerging and Mainstay Balanced
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Mainstay is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Emerging Country 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 Emerging 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 Emerging Country 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 Emerging i.e., Gmo Emerging and Mainstay Balanced go up and down completely randomly.
Pair Corralation between Gmo Emerging and Mainstay Balanced
Assuming the 90 days horizon Gmo Emerging is expected to generate 3.18 times less return on investment than Mainstay Balanced. But when comparing it to its historical volatility, Gmo Emerging Country is 1.48 times less risky than Mainstay Balanced. It trades about 0.08 of its potential returns per unit of risk. Mainstay Balanced Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,198 in Mainstay Balanced Fund on August 26, 2024 and sell it today you would earn a total of 65.00 from holding Mainstay Balanced Fund or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Emerging Country vs. Mainstay Balanced Fund
Performance |
| Timeline |
| Gmo Emerging Country |
| Mainstay Balanced |
Gmo Emerging and Mainstay Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Emerging and Mainstay Balanced
The main advantage of trading using opposite Gmo Emerging and Mainstay Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Emerging 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 Emerging vs. Jpmorgan Emerging Markets | Gmo Emerging vs. T Rowe Price | Gmo Emerging vs. Sit Emerging Markets | Gmo Emerging vs. Emerging Markets Bond |
| Mainstay Balanced vs. Rationalpier 88 Convertible | Mainstay Balanced vs. Gmo Emerging Country | Mainstay Balanced vs. Ms Global Fixed | Mainstay Balanced vs. Versatile Bond Portfolio |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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