Correlation Between Gmo International and Ab Select
Can any of the company-specific risk be diversified away by investing in both Gmo International and Ab Select 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 International and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo International Equity and Ab Select Longshort, you can compare the effects of market volatilities on Gmo International and Ab Select 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 International with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo International and Ab Select.
Diversification Opportunities for Gmo International and Ab Select
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gmo and ASCLX is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gmo International Equity and Ab Select Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Longshort and Gmo International 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 International Equity are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Longshort has no effect on the direction of Gmo International i.e., Gmo International and Ab Select go up and down completely randomly.
Pair Corralation between Gmo International and Ab Select
Assuming the 90 days horizon Gmo International Equity is expected to under-perform the Ab Select. In addition to that, Gmo International is 1.68 times more volatile than Ab Select Longshort. It trades about -0.02 of its total potential returns per unit of risk. Ab Select Longshort is currently generating about 0.35 per unit of volatility. If you would invest 1,353 in Ab Select Longshort on September 1, 2024 and sell it today you would earn a total of 55.00 from holding Ab Select Longshort or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo International Equity vs. Ab Select Longshort
Performance |
| Timeline |
| Gmo International Equity |
| Ab Select Longshort |
Gmo International and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo International and Ab Select
The main advantage of trading using opposite Gmo International and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo International position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Gmo International vs. Ab Select Longshort | Gmo International vs. Barings Active Short | Gmo International vs. Astor Longshort Fund | Gmo International vs. Jhancock Short Duration |
| Ab Select vs. Pace International Emerging | Ab Select vs. Goldman Sachs Emerging | Ab Select vs. Barings Emerging Markets | Ab Select vs. Artisan 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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