Correlation Between The Merger and Gateway Fund
Can any of the company-specific risk be diversified away by investing in both The Merger and Gateway Fund 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 The Merger and Gateway Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Merger Fund and Gateway Fund Class, you can compare the effects of market volatilities on The Merger and Gateway Fund 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 The Merger with a short position of Gateway Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Merger and Gateway Fund.
Diversification Opportunities for The Merger and Gateway Fund
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between The and Gateway is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding The Merger Fund and Gateway Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Fund Class and The Merger 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 The Merger Fund are associated (or correlated) with Gateway Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Fund Class has no effect on the direction of The Merger i.e., The Merger and Gateway Fund go up and down completely randomly.
Pair Corralation between The Merger and Gateway Fund
Assuming the 90 days horizon The Merger Fund is expected to under-perform the Gateway Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Merger Fund is 2.58 times less risky than Gateway Fund. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Gateway Fund Class is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,590 in Gateway Fund Class on August 29, 2024 and sell it today you would earn a total of 119.00 from holding Gateway Fund Class or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Merger Fund vs. Gateway Fund Class
Performance |
| Timeline |
| Merger Fund |
| Gateway Fund Class |
The Merger and Gateway Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Merger and Gateway Fund
The main advantage of trading using opposite The Merger and Gateway Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Merger position performs unexpectedly, Gateway Fund 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 Gateway Fund will offset losses from the drop in Gateway Fund's long position.| The Merger vs. Strategic Advisers International | The Merger vs. Strategic Advisers Income | The Merger vs. Strategic Advisers E | The Merger vs. Strategic Advisers Emerging |
| Gateway Fund vs. Bbh Intermediate Municipal | Gateway Fund vs. Federated Government Ultrashort | Gateway Fund vs. Nebraska Municipal Fund | Gateway Fund vs. Baird Strategic Municipal |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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