Correlation Between Gmo Sgm and American Independence
Can any of the company-specific risk be diversified away by investing in both Gmo Sgm and American Independence 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 Sgm and American Independence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Sgm Major and American Independence Kansas, you can compare the effects of market volatilities on Gmo Sgm and American Independence 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 Sgm with a short position of American Independence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Sgm and American Independence.
Diversification Opportunities for Gmo Sgm and American Independence
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gmo and American is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Sgm Major and American Independence Kansas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Independence and Gmo Sgm 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 Sgm Major are associated (or correlated) with American Independence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Independence has no effect on the direction of Gmo Sgm i.e., Gmo Sgm and American Independence go up and down completely randomly.
Pair Corralation between Gmo Sgm and American Independence
If you would invest 1,007 in American Independence Kansas on August 29, 2024 and sell it today you would earn a total of 8.00 from holding American Independence Kansas or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Gmo Sgm Major vs. American Independence Kansas
Performance |
| Timeline |
| Gmo Sgm Major |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| American Independence |
Gmo Sgm and American Independence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Sgm and American Independence
The main advantage of trading using opposite Gmo Sgm and American Independence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Sgm position performs unexpectedly, American Independence 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 American Independence will offset losses from the drop in American Independence's long position.| Gmo Sgm vs. Gmo Opportunistic Income | Gmo Sgm vs. William Blair Emerging | Gmo Sgm vs. Guggenheim Limited Duration |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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