Correlation Between Gmo Resources and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Gmo Resources and Guinness Atkinson 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 Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Resources and Guinness Atkinson Alternative, you can compare the effects of market volatilities on Gmo Resources and Guinness Atkinson 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 Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Resources and Guinness Atkinson.
Diversification Opportunities for Gmo Resources and Guinness Atkinson
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Guinness is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Resources and Guinness Atkinson Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson 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 Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson has no effect on the direction of Gmo Resources i.e., Gmo Resources and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Gmo Resources and Guinness Atkinson
Assuming the 90 days horizon Gmo Resources is expected to under-perform the Guinness Atkinson. In addition to that, Gmo Resources is 1.07 times more volatile than Guinness Atkinson Alternative. It trades about -0.01 of its total potential returns per unit of risk. Guinness Atkinson Alternative is currently generating about -0.01 per unit of volatility. If you would invest 608.00 in Guinness Atkinson Alternative on August 30, 2024 and sell it today you would lose (60.00) from holding Guinness Atkinson Alternative or give up 9.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Resources vs. Guinness Atkinson Alternative
Performance |
| Timeline |
| Gmo Resources |
| Guinness Atkinson |
Gmo Resources and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Resources and Guinness Atkinson
The main advantage of trading using opposite Gmo Resources and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Resources position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.The idea behind Gmo Resources and Guinness Atkinson Alternative pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Guinness Atkinson vs. Firsthand Alternative Energy | Guinness Atkinson vs. Portfolio 21 Global | Guinness Atkinson vs. HUMANA INC | Guinness Atkinson vs. Aquagold International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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