Correlation Between City National and Gmo Trust
Can any of the company-specific risk be diversified away by investing in both City National and Gmo Trust 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 City National and Gmo Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Gmo Trust , you can compare the effects of market volatilities on City National and Gmo Trust 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 City National with a short position of Gmo Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Gmo Trust.
Diversification Opportunities for City National and Gmo Trust
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between City and Gmo is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Gmo Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Trust and City National 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 City National Rochdale are associated (or correlated) with Gmo Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Trust has no effect on the direction of City National i.e., City National and Gmo Trust go up and down completely randomly.
Pair Corralation between City National and Gmo Trust
Assuming the 90 days horizon City National Rochdale is expected to generate 0.06 times more return on investment than Gmo Trust. However, City National Rochdale is 17.78 times less risky than Gmo Trust. It trades about 0.38 of its potential returns per unit of risk. Gmo Trust is currently generating about -0.17 per unit of risk. If you would invest 1,932 in City National Rochdale on October 26, 2024 and sell it today you would earn a total of 22.00 from holding City National Rochdale or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Gmo Trust
Performance |
| Timeline |
| City National Rochdale |
| Gmo Trust |
City National and Gmo Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Gmo Trust
The main advantage of trading using opposite City National and Gmo Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Gmo Trust 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 Trust will offset losses from the drop in Gmo Trust's long position.| City National vs. Fisher Large Cap | City National vs. Hartford Moderate Allocation | City National vs. Rational Strategic Allocation | City National vs. Balanced Allocation Fund |
| Gmo Trust vs. Lord Abbett Short | Gmo Trust vs. Voya High Yield | Gmo Trust vs. Transamerica High Yield | Gmo Trust vs. City National Rochdale |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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