Correlation Between Gmo E and Gmo Equity
Can any of the company-specific risk be diversified away by investing in both Gmo E and Gmo Equity 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 E and Gmo Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo E Plus and Gmo Equity Allocation, you can compare the effects of market volatilities on Gmo E and Gmo Equity 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 E with a short position of Gmo Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo E and Gmo Equity.
Diversification Opportunities for Gmo E and Gmo Equity
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gmo and Gmo is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gmo E Plus and Gmo Equity Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Equity Allocation and Gmo E 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 E Plus are associated (or correlated) with Gmo Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Equity Allocation has no effect on the direction of Gmo E i.e., Gmo E and Gmo Equity go up and down completely randomly.
Pair Corralation between Gmo E and Gmo Equity
Assuming the 90 days horizon Gmo E Plus is expected to generate 0.15 times more return on investment than Gmo Equity. However, Gmo E Plus is 6.87 times less risky than Gmo Equity. It trades about 0.15 of its potential returns per unit of risk. Gmo Equity Allocation is currently generating about -0.22 per unit of risk. If you would invest 1,775 in Gmo E Plus on September 12, 2024 and sell it today you would earn a total of 16.00 from holding Gmo E Plus or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo E Plus vs. Gmo Equity Allocation
Performance |
| Timeline |
| Gmo E Plus |
| Gmo Equity Allocation |
Gmo E and Gmo Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo E and Gmo Equity
The main advantage of trading using opposite Gmo E and Gmo Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo E position performs unexpectedly, Gmo Equity 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 Gmo Equity will offset losses from the drop in Gmo Equity's long position.| Gmo E vs. Gmo Trust | Gmo E vs. Gmo Small Cap | Gmo E vs. Gmo International Opportunistic | Gmo E vs. Gmo Quality Cyclicals |
| Gmo Equity vs. Scharf Fund Retail | Gmo Equity vs. Locorr Dynamic Equity | Gmo Equity vs. Us Vector Equity | Gmo Equity vs. Multimedia Portfolio Multimedia |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |