Correlation Between Gmo Resources and Bond Fund
Can any of the company-specific risk be diversified away by investing in both Gmo Resources and Bond Fund 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 Resources and Bond Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Resources and The Bond Fund, you can compare the effects of market volatilities on Gmo Resources and Bond Fund 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 Resources with a short position of Bond Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Resources and Bond Fund.
Diversification Opportunities for Gmo Resources and Bond Fund
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gmo and Bond is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Resources and The Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bond Fund and Gmo Resources 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 Resources are associated (or correlated) with Bond Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bond Fund has no effect on the direction of Gmo Resources i.e., Gmo Resources and Bond Fund go up and down completely randomly.
Pair Corralation between Gmo Resources and Bond Fund
Assuming the 90 days horizon Gmo Resources is expected to under-perform the Bond Fund. In addition to that, Gmo Resources is 3.56 times more volatile than The Bond Fund. It trades about -0.01 of its total potential returns per unit of risk. The Bond Fund is currently generating about 0.1 per unit of volatility. If you would invest 1,620 in The Bond Fund on September 4, 2024 and sell it today you would earn a total of 179.00 from holding The Bond Fund or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Gmo Resources vs. The Bond Fund
Performance |
| Timeline |
| Gmo Resources |
| Bond Fund |
Gmo Resources and Bond Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Resources and Bond Fund
The main advantage of trading using opposite Gmo Resources and Bond Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Resources position performs unexpectedly, Bond Fund 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 Bond Fund will offset losses from the drop in Bond Fund's long position.| Gmo Resources vs. Gmo E Plus | Gmo Resources vs. Gmo Trust | Gmo Resources vs. Gmo Treasury Fund | Gmo Resources vs. Gmo Trust |
| Bond Fund vs. Prudential Jennison Financial | Bond Fund vs. Mesirow Financial Small | Bond Fund vs. Angel Oak Financial | Bond Fund vs. Vanguard Financials Index |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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