Correlation Between Muzinich and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Muzinich and Gmo Global 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 Muzinich and Gmo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Muzinich High Yield and Gmo Global Equity, you can compare the effects of market volatilities on Muzinich and Gmo Global 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 Muzinich with a short position of Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Muzinich and Gmo Global.
Diversification Opportunities for Muzinich and Gmo Global
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Muzinich and Gmo is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Muzinich High Yield and Gmo Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Equity and Muzinich 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 Muzinich High Yield are associated (or correlated) with Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Equity has no effect on the direction of Muzinich i.e., Muzinich and Gmo Global go up and down completely randomly.
Pair Corralation between Muzinich and Gmo Global
Assuming the 90 days horizon Muzinich is expected to generate 2.14 times less return on investment than Gmo Global. But when comparing it to its historical volatility, Muzinich High Yield is 3.21 times less risky than Gmo Global. It trades about 0.13 of its potential returns per unit of risk. Gmo Global Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,210 in Gmo Global Equity on September 5, 2024 and sell it today you would earn a total of 823.00 from holding Gmo Global Equity or generate 37.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Muzinich High Yield vs. Gmo Global Equity
Performance |
| Timeline |
| Muzinich High Yield |
| Gmo Global Equity |
Muzinich and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Muzinich and Gmo Global
The main advantage of trading using opposite Muzinich and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Muzinich position performs unexpectedly, Gmo Global 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 Global will offset losses from the drop in Gmo Global's long position.| Muzinich vs. Gmo Global Equity | Muzinich vs. Calamos Global Equity | Muzinich vs. Jpmorgan Equity Income | Muzinich vs. The Hartford Equity |
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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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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