Correlation Between Gmo Trust and Gmo Small
Can any of the company-specific risk be diversified away by investing in both Gmo Trust and Gmo Small 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 Trust and Gmo Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Trust and Gmo Small Cap, you can compare the effects of market volatilities on Gmo Trust and Gmo Small 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 Trust with a short position of Gmo Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Trust and Gmo Small.
Diversification Opportunities for Gmo Trust and Gmo Small
Almost no diversification
The 3 months correlation between Gmo and Gmo is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Trust and Gmo Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Small Cap and Gmo Trust 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 Trust are associated (or correlated) with Gmo Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Small Cap has no effect on the direction of Gmo Trust i.e., Gmo Trust and Gmo Small go up and down completely randomly.
Pair Corralation between Gmo Trust and Gmo Small
Assuming the 90 days horizon Gmo Trust is expected to generate 1.22 times less return on investment than Gmo Small. But when comparing it to its historical volatility, Gmo Trust is 1.37 times less risky than Gmo Small. It trades about 0.2 of its potential returns per unit of risk. Gmo Small Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,604 in Gmo Small Cap on August 30, 2024 and sell it today you would earn a total of 148.00 from holding Gmo Small Cap or generate 5.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Trust vs. Gmo Small Cap
Performance |
| Timeline |
| Gmo Trust |
| Gmo Small Cap |
Gmo Trust and Gmo Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Trust and Gmo Small
The main advantage of trading using opposite Gmo Trust and Gmo Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Trust position performs unexpectedly, Gmo Small 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 Small will offset losses from the drop in Gmo Small's long position.| Gmo Trust vs. Applied Finance Explorer | Gmo Trust vs. Hennessy Nerstone Mid | Gmo Trust vs. Great West Loomis Sayles | Gmo Trust vs. Victory Rs Partners |
| Gmo Small vs. Putnam Equity Income | Gmo Small vs. Putnam Growth Opportunities | Gmo Small vs. HUMANA INC | Gmo Small vs. Aquagold International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |