Correlation Between Gmo High and Domini Impact
Can any of the company-specific risk be diversified away by investing in both Gmo High and Domini Impact 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 High and Domini Impact into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Domini Impact Bond, you can compare the effects of market volatilities on Gmo High and Domini Impact 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 High with a short position of Domini Impact. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Domini Impact.
Diversification Opportunities for Gmo High and Domini Impact
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gmo and Domini is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Domini Impact Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Domini Impact Bond and Gmo High 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 High Yield are associated (or correlated) with Domini Impact. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Domini Impact Bond has no effect on the direction of Gmo High i.e., Gmo High and Domini Impact go up and down completely randomly.
Pair Corralation between Gmo High and Domini Impact
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.56 times more return on investment than Domini Impact. However, Gmo High Yield is 1.8 times less risky than Domini Impact. It trades about 0.18 of its potential returns per unit of risk. Domini Impact Bond is currently generating about 0.04 per unit of risk. If you would invest 1,787 in Gmo High Yield on August 29, 2024 and sell it today you would earn a total of 14.00 from holding Gmo High Yield or generate 0.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Domini Impact Bond
Performance |
| Timeline |
| Gmo High Yield |
| Domini Impact Bond |
Gmo High and Domini Impact Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Domini Impact
The main advantage of trading using opposite Gmo High and Domini Impact positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Domini Impact 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 Domini Impact will offset losses from the drop in Domini Impact's long position.| Gmo High vs. Ab Government Exchange | Gmo High vs. Dunham Porategovernment Bond | Gmo High vs. Lord Abbett Government | Gmo High vs. Virtus Seix Government |
| Domini Impact vs. Domini Impact Equity | Domini Impact vs. Domini Sustainable Solutions | Domini Impact vs. Domini Impact International | Domini Impact vs. Domini Impact 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |