Correlation Between Gmo Core and Aig Government
Can any of the company-specific risk be diversified away by investing in both Gmo Core and Aig Government 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 Core and Aig Government 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 Aig Government Money, you can compare the effects of market volatilities on Gmo Core and Aig Government 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 Core with a short position of Aig Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Core and Aig Government.
Diversification Opportunities for Gmo Core and Aig Government
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gmo and Aig is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Gmo E Plus and Aig Government Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aig Government Money and Gmo Core 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 Aig Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aig Government Money has no effect on the direction of Gmo Core i.e., Gmo Core and Aig Government go up and down completely randomly.
Pair Corralation between Gmo Core and Aig Government
Assuming the 90 days horizon Gmo E Plus is expected to generate 1.72 times more return on investment than Aig Government. However, Gmo Core is 1.72 times more volatile than Aig Government Money. It trades about 0.28 of its potential returns per unit of risk. Aig Government Money is currently generating about 0.22 per unit of risk. If you would invest 1,699 in Gmo E Plus on November 28, 2024 and sell it today you would earn a total of 30.00 from holding Gmo E Plus or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo E Plus vs. Aig Government Money
Performance |
| Timeline |
| Gmo E Plus |
| Aig Government Money |
Gmo Core and Aig Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Core and Aig Government
The main advantage of trading using opposite Gmo Core and Aig Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Core position performs unexpectedly, Aig Government 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 Aig Government will offset losses from the drop in Aig Government's long position.| Gmo Core vs. Gmo High Yield | Gmo Core vs. Calvert High Yield | Gmo Core vs. City National Rochdale | Gmo Core vs. Voya High Yield |
| Aig Government vs. Goldman Sachs Financial | Aig Government vs. Angel Oak Financial | Aig Government vs. 1919 Financial Services | Aig Government vs. Blackrock Financial Institutions |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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