Correlation Between Emerging Markets and Gmo Emerging
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Gmo Emerging 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 Emerging Markets and Gmo Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Bond and Gmo Emerging Ntry, you can compare the effects of market volatilities on Emerging Markets and Gmo Emerging 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 Emerging Markets with a short position of Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Gmo Emerging.
Diversification Opportunities for Emerging Markets and Gmo Emerging
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emerging and Gmo is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Bond and Gmo Emerging Ntry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Ntry and Emerging Markets 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 Emerging Markets Bond are associated (or correlated) with Gmo Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Emerging Ntry has no effect on the direction of Emerging Markets i.e., Emerging Markets and Gmo Emerging go up and down completely randomly.
Pair Corralation between Emerging Markets and Gmo Emerging
Assuming the 90 days horizon Emerging Markets is expected to generate 1.15 times less return on investment than Gmo Emerging. But when comparing it to its historical volatility, Emerging Markets Bond is 1.11 times less risky than Gmo Emerging. It trades about 0.16 of its potential returns per unit of risk. Gmo Emerging Ntry is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,061 in Gmo Emerging Ntry on August 29, 2024 and sell it today you would earn a total of 28.00 from holding Gmo Emerging Ntry or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Bond vs. Gmo Emerging Ntry
Performance |
| Timeline |
| Emerging Markets Bond |
| Gmo Emerging Ntry |
Emerging Markets and Gmo Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Gmo Emerging
The main advantage of trading using opposite Emerging Markets and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Gmo Emerging 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 Emerging will offset losses from the drop in Gmo Emerging's long position.| Emerging Markets vs. Pimco High Yield | Emerging Markets vs. Prudential High Yield | Emerging Markets vs. Blackrock High Yield | Emerging Markets vs. Tiaa Cref High Yield Fund |
| Gmo Emerging vs. Gmo Emerging Country | Gmo Emerging vs. Tcw Emerging Markets | Gmo Emerging vs. Jpmorgan Emerging Markets | Gmo Emerging vs. Gmo Emerging Markets |
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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