Correlation Between Gmo High and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Gmo High and Aim Investment 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 Aim Investment 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 Aim Investment Funds, you can compare the effects of market volatilities on Gmo High and Aim Investment 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 Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Aim Investment.
Diversification Opportunities for Gmo High and Aim Investment
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GMO and Aim is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Aim Investment Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Funds 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 Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Funds has no effect on the direction of Gmo High i.e., Gmo High and Aim Investment go up and down completely randomly.
Pair Corralation between Gmo High and Aim Investment
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.47 times more return on investment than Aim Investment. However, Gmo High Yield is 2.15 times less risky than Aim Investment. It trades about 0.36 of its potential returns per unit of risk. Aim Investment Funds is currently generating about 0.15 per unit of risk. If you would invest 1,784 in Gmo High Yield on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Gmo High Yield or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Aim Investment Funds
Performance |
| Timeline |
| Gmo High Yield |
| Aim Investment Funds |
Gmo High and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Aim Investment
The main advantage of trading using opposite Gmo High and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment's 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 |
| Aim Investment vs. Rbc Emerging Markets | Aim Investment vs. Legg Mason Partners | Aim Investment vs. Dodge Cox Emerging | Aim Investment vs. Black Oak Emerging |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |