Correlation Between Mairs Power and Gmo Core
Can any of the company-specific risk be diversified away by investing in both Mairs Power and Gmo Core 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 Mairs Power and Gmo Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mairs Power Growth and Gmo E Plus, you can compare the effects of market volatilities on Mairs Power and Gmo Core 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 Mairs Power with a short position of Gmo Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mairs Power and Gmo Core.
Diversification Opportunities for Mairs Power and Gmo Core
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mairs and Gmo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mairs Power Growth and Gmo E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo E Plus and Mairs Power 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 Mairs Power Growth are associated (or correlated) with Gmo Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo E Plus has no effect on the direction of Mairs Power i.e., Mairs Power and Gmo Core go up and down completely randomly.
Pair Corralation between Mairs Power and Gmo Core
Assuming the 90 days horizon Mairs Power Growth is expected to under-perform the Gmo Core. In addition to that, Mairs Power is 3.71 times more volatile than Gmo E Plus. It trades about -0.22 of its total potential returns per unit of risk. Gmo E Plus is currently generating about -0.34 per unit of volatility. If you would invest 1,700 in Gmo E Plus on October 16, 2024 and sell it today you would lose (28.00) from holding Gmo E Plus or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mairs Power Growth vs. Gmo E Plus
Performance |
| Timeline |
| Mairs Power Growth |
| Gmo E Plus |
Mairs Power and Gmo Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mairs Power and Gmo Core
The main advantage of trading using opposite Mairs Power and Gmo Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mairs Power position performs unexpectedly, Gmo Core 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 Core will offset losses from the drop in Gmo Core's long position.| Mairs Power vs. Meridian Trarian Fund | Mairs Power vs. Mairs Power Balanced | Mairs Power vs. Clipper Fund Inc | Mairs Power vs. Meridian Growth Fund |
| Gmo Core vs. Transamerica Capital Growth | Gmo Core vs. Calamos Growth Fund | Gmo Core vs. Qs Growth Fund | Gmo Core vs. Mairs Power Growth |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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