Correlation Between Gmo High and Resq Strategic
Can any of the company-specific risk be diversified away by investing in both Gmo High and Resq Strategic 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 Resq Strategic 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 Resq Strategic Income, you can compare the effects of market volatilities on Gmo High and Resq Strategic 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 Resq Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Resq Strategic.
Diversification Opportunities for Gmo High and Resq Strategic
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gmo and Resq is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Resq Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resq Strategic Income 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 Resq Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resq Strategic Income has no effect on the direction of Gmo High i.e., Gmo High and Resq Strategic go up and down completely randomly.
Pair Corralation between Gmo High and Resq Strategic
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.32 times more return on investment than Resq Strategic. However, Gmo High Yield is 3.12 times less risky than Resq Strategic. It trades about 0.13 of its potential returns per unit of risk. Resq Strategic Income is currently generating about -0.01 per unit of risk. If you would invest 1,541 in Gmo High Yield on September 14, 2024 and sell it today you would earn a total of 271.00 from holding Gmo High Yield or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.02% |
| Values | Daily Returns |
Gmo High Yield vs. Resq Strategic Income
Performance |
| Timeline |
| Gmo High Yield |
| Resq Strategic Income |
Gmo High and Resq Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Resq Strategic
The main advantage of trading using opposite Gmo High and Resq Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Resq Strategic 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 Resq Strategic will offset losses from the drop in Resq Strategic's long position.| Gmo High vs. Commodities Strategy Fund | Gmo High vs. T Rowe Price | Gmo High vs. T Rowe Price | Gmo High vs. T Rowe Price |
| Resq Strategic vs. Gmo High Yield | Resq Strategic vs. Virtus High Yield | Resq Strategic vs. Guggenheim High Yield | Resq Strategic vs. Pax 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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