Correlation Between Gmo Resources and Federated Floating
Can any of the company-specific risk be diversified away by investing in both Gmo Resources and Federated Floating 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 Federated Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Resources and Federated Floating Rate, you can compare the effects of market volatilities on Gmo Resources and Federated Floating 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 Federated Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Resources and Federated Floating.
Diversification Opportunities for Gmo Resources and Federated Floating
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gmo and Federated is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Resources and Federated Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Floating Rate 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 Federated Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Floating Rate has no effect on the direction of Gmo Resources i.e., Gmo Resources and Federated Floating go up and down completely randomly.
Pair Corralation between Gmo Resources and Federated Floating
Assuming the 90 days horizon Gmo Resources is expected to under-perform the Federated Floating. In addition to that, Gmo Resources is 10.32 times more volatile than Federated Floating Rate. It trades about -0.05 of its total potential returns per unit of risk. Federated Floating Rate is currently generating about 0.17 per unit of volatility. If you would invest 844.00 in Federated Floating Rate on September 1, 2024 and sell it today you would earn a total of 24.00 from holding Federated Floating Rate or generate 2.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Resources vs. Federated Floating Rate
Performance |
| Timeline |
| Gmo Resources |
| Federated Floating Rate |
Gmo Resources and Federated Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Resources and Federated Floating
The main advantage of trading using opposite Gmo Resources and Federated Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Resources position performs unexpectedly, Federated Floating 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 Floating will offset losses from the drop in Federated Floating's long position.| Gmo Resources vs. Rbb Fund | Gmo Resources vs. Omni Small Cap Value | Gmo Resources vs. Nasdaq 100 Index Fund | Gmo Resources vs. Artisan Thematic Fund |
| Federated Floating vs. Federated Emerging Market | Federated Floating vs. Federated Mdt All | Federated Floating vs. Federated Mdt Balanced | Federated Floating vs. Federated Global Allocation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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