Correlation Between Eagle Capital and Gmo High
Can any of the company-specific risk be diversified away by investing in both Eagle Capital and Gmo High 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 Eagle Capital and Gmo High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Capital Appreciation and Gmo High Yield, you can compare the effects of market volatilities on Eagle Capital and Gmo High 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 Eagle Capital with a short position of Gmo High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Capital and Gmo High.
Diversification Opportunities for Eagle Capital and Gmo High
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Eagle and GMO is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Capital Appreciation and Gmo High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo High Yield and Eagle Capital 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 Eagle Capital Appreciation are associated (or correlated) with Gmo High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo High Yield has no effect on the direction of Eagle Capital i.e., Eagle Capital and Gmo High go up and down completely randomly.
Pair Corralation between Eagle Capital and Gmo High
Assuming the 90 days horizon Eagle Capital Appreciation is expected to generate 4.99 times more return on investment than Gmo High. However, Eagle Capital is 4.99 times more volatile than Gmo High Yield. It trades about 0.08 of its potential returns per unit of risk. Gmo High Yield is currently generating about 0.18 per unit of risk. If you would invest 5,386 in Eagle Capital Appreciation on September 4, 2024 and sell it today you would earn a total of 1,427 from holding Eagle Capital Appreciation or generate 26.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Capital Appreciation vs. Gmo High Yield
Performance |
| Timeline |
| Eagle Capital Apprec |
| Gmo High Yield |
Eagle Capital and Gmo High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Capital and Gmo High
The main advantage of trading using opposite Eagle Capital and Gmo High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Capital position performs unexpectedly, Gmo High 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 High will offset losses from the drop in Gmo High's long position.| Eagle Capital vs. Gmo High Yield | Eagle Capital vs. Angel Oak Financial | Eagle Capital vs. Ab Impact Municipal | Eagle Capital vs. Bbh Intermediate Municipal |
| Gmo High vs. California High Yield Municipal | Gmo High vs. Siit High Yield | Gmo High vs. Pace 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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