Correlation Between Gmo Resources and Aig Government
Can any of the company-specific risk be diversified away by investing in both Gmo Resources and Aig Government 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 Aig Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Resources and Aig Government Money, you can compare the effects of market volatilities on Gmo Resources and Aig Government 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 Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Resources and Aig Government.
Diversification Opportunities for Gmo Resources and Aig Government
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gmo and Aig is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Resources and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Gmo Resources i.e., Gmo Resources and Aig Government go up and down completely randomly.
Pair Corralation between Gmo Resources and Aig Government
Assuming the 90 days horizon Gmo Resources is expected to generate 6.46 times more return on investment than Aig Government. However, Gmo Resources is 6.46 times more volatile than Aig Government Money. It trades about 0.02 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.01 per unit of risk. If you would invest 2,013 in Gmo Resources on September 2, 2024 and sell it today you would earn a total of 16.00 from holding Gmo Resources or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Resources vs. Aig Government Money
Performance |
| Timeline |
| Gmo Resources |
| Aig Government Money |
Gmo Resources and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Resources and Aig Government
The main advantage of trading using opposite Gmo Resources and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Resources position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Gmo Resources vs. T Rowe Price | Gmo Resources vs. Franklin High Income | Gmo Resources vs. T Rowe Price | Gmo Resources vs. Aqr Risk Balanced Modities |
| Aig Government vs. Artisan Thematic Fund | Aig Government vs. Growth Opportunities Fund | Aig Government vs. Volumetric Fund Volumetric | Aig Government vs. Small Cap Stock |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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