Correlation Between Gmo High and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Gmo High and Emerging Markets 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 Emerging Markets 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 Emerging Markets Leaders, you can compare the effects of market volatilities on Gmo High and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Emerging Markets.
Diversification Opportunities for Gmo High and Emerging Markets
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GMO and Emerging is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Emerging Markets Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Leaders 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Leaders has no effect on the direction of Gmo High i.e., Gmo High and Emerging Markets go up and down completely randomly.
Pair Corralation between Gmo High and Emerging Markets
If you would invest 1,705 in Gmo High Yield on September 3, 2024 and sell it today you would earn a total of 103.00 from holding Gmo High Yield or generate 6.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.8% |
| Values | Daily Returns |
Gmo High Yield vs. Emerging Markets Leaders
Performance |
| Timeline |
| Gmo High Yield |
| Emerging Markets Leaders |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gmo High and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Emerging Markets
The main advantage of trading using opposite Gmo High and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Gmo High vs. Vanguard High Yield Corporate | Gmo High vs. Vanguard High Yield Porate | Gmo High vs. Blackrock Hi Yld | Gmo High vs. Blackrock High Yield |
| Emerging Markets vs. Pioneer High Yield | Emerging Markets vs. Lgm Risk Managed | Emerging Markets vs. Goldman Sachs High | Emerging Markets vs. Gmo High Yield |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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