Correlation Between Gmo Resources and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Gmo Resources and Catalystmillburn 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 Catalystmillburn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Resources and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Gmo Resources and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Resources and Catalystmillburn.
Diversification Opportunities for Gmo Resources and Catalystmillburn
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gmo and Catalystmillburn is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Resources and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Gmo Resources i.e., Gmo Resources and Catalystmillburn go up and down completely randomly.
Pair Corralation between Gmo Resources and Catalystmillburn
Assuming the 90 days horizon Gmo Resources is expected to under-perform the Catalystmillburn. In addition to that, Gmo Resources is 1.87 times more volatile than Catalystmillburn Hedge Strategy. It trades about -0.02 of its total potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.04 per unit of volatility. If you would invest 3,501 in Catalystmillburn Hedge Strategy on September 13, 2024 and sell it today you would earn a total of 511.00 from holding Catalystmillburn Hedge Strategy or generate 14.6% 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. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Gmo Resources |
| Catalystmillburn Hedge |
Gmo Resources and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Resources and Catalystmillburn
The main advantage of trading using opposite Gmo Resources and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Resources position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn'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 |
| Catalystmillburn vs. Energy Basic Materials | Catalystmillburn vs. Franklin Natural Resources | Catalystmillburn vs. Invesco Energy Fund | Catalystmillburn vs. Gmo Resources |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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