Correlation Between Gmo High and Lind Capital
Can any of the company-specific risk be diversified away by investing in both Gmo High and Lind Capital 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 Lind Capital 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 Lind Capital Partners, you can compare the effects of market volatilities on Gmo High and Lind Capital 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 Lind Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Lind Capital.
Diversification Opportunities for Gmo High and Lind Capital
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GMO and Lind is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Lind Capital Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lind Capital Partners 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 Lind Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lind Capital Partners has no effect on the direction of Gmo High i.e., Gmo High and Lind Capital go up and down completely randomly.
Pair Corralation between Gmo High and Lind Capital
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.62 times more return on investment than Lind Capital. However, Gmo High Yield is 1.61 times less risky than Lind Capital. It trades about 0.36 of its potential returns per unit of risk. Lind Capital Partners is currently generating about 0.13 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Lind Capital Partners
Performance |
| Timeline |
| Gmo High Yield |
| Lind Capital Partners |
Gmo High and Lind Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Lind Capital
The main advantage of trading using opposite Gmo High and Lind Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Lind Capital 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 Lind Capital will offset losses from the drop in Lind Capital'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 |
| Lind Capital vs. Vanguard Total Stock | Lind Capital vs. Vanguard 500 Index | Lind Capital vs. Vanguard Total Stock | Lind Capital vs. Vanguard Total 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |