Correlation Between Federated Ohio and Gmo Resources
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Gmo Resources 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 Federated Ohio and Gmo Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ohio Municipal and Gmo Resources, you can compare the effects of market volatilities on Federated Ohio and Gmo Resources 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 Federated Ohio with a short position of Gmo Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Gmo Resources.
Diversification Opportunities for Federated Ohio and Gmo Resources
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Federated and Gmo is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Gmo Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Resources and Federated Ohio 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 Federated Ohio Municipal are associated (or correlated) with Gmo Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Resources has no effect on the direction of Federated Ohio i.e., Federated Ohio and Gmo Resources go up and down completely randomly.
Pair Corralation between Federated Ohio and Gmo Resources
Assuming the 90 days horizon Federated Ohio Municipal is expected to generate 0.15 times more return on investment than Gmo Resources. However, Federated Ohio Municipal is 6.6 times less risky than Gmo Resources. It trades about 0.1 of its potential returns per unit of risk. Gmo Resources is currently generating about 0.0 per unit of risk. If you would invest 1,005 in Federated Ohio Municipal on September 4, 2024 and sell it today you would earn a total of 49.00 from holding Federated Ohio Municipal or generate 4.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Gmo Resources
Performance |
| Timeline |
| Federated Ohio Municipal |
| Gmo Resources |
Federated Ohio and Gmo Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Gmo Resources
The main advantage of trading using opposite Federated Ohio and Gmo Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Gmo Resources 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 Resources will offset losses from the drop in Gmo Resources' long position.| Federated Ohio vs. Quantitative Longshort Equity | Federated Ohio vs. Limited Term Tax | Federated Ohio vs. Aqr Long Short Equity | Federated Ohio vs. Astor Longshort Fund |
| Gmo Resources vs. Gmo E Plus | Gmo Resources vs. Gmo Trust | Gmo Resources vs. Gmo Treasury Fund | Gmo Resources vs. Gmo Trust |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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