Correlation Between Mainstay Candriam and Gmo High
Can any of the company-specific risk be diversified away by investing in both Mainstay Candriam 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 Mainstay Candriam and Gmo High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Candriam Emerging and Gmo High Yield, you can compare the effects of market volatilities on Mainstay Candriam 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 Mainstay Candriam with a short position of Gmo High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Candriam and Gmo High.
Diversification Opportunities for Mainstay Candriam and Gmo High
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mainstay and GMO is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Candriam Emerging 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 Mainstay Candriam 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 Mainstay Candriam Emerging 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 Mainstay Candriam i.e., Mainstay Candriam and Gmo High go up and down completely randomly.
Pair Corralation between Mainstay Candriam and Gmo High
Assuming the 90 days horizon Mainstay Candriam Emerging is expected to under-perform the Gmo High. In addition to that, Mainstay Candriam is 3.75 times more volatile than Gmo High Yield. It trades about -0.2 of its total potential returns per unit of risk. Gmo High Yield is currently generating about 0.36 per unit of volatility. If you would invest 1,784 in Gmo High Yield on September 4, 2024 and sell it today you would earn a total of 24.00 from holding Gmo High Yield or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mainstay Candriam Emerging vs. Gmo High Yield
Performance |
| Timeline |
| Mainstay Candriam |
| Gmo High Yield |
Mainstay Candriam and Gmo High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Candriam and Gmo High
The main advantage of trading using opposite Mainstay Candriam and Gmo High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Candriam 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.| Mainstay Candriam vs. Gmo High Yield | Mainstay Candriam vs. Ppm High Yield | Mainstay Candriam vs. Calvert High Yield | Mainstay Candriam vs. Lord Abbett High |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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