Correlation Between Guggenheim Managed and Gmo Emerging
Can any of the company-specific risk be diversified away by investing in both Guggenheim Managed 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 Guggenheim Managed and Gmo Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Managed Futures and Gmo Emerging Markets, you can compare the effects of market volatilities on Guggenheim Managed 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 Guggenheim Managed with a short position of Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Managed and Gmo Emerging.
Diversification Opportunities for Guggenheim Managed and Gmo Emerging
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guggenheim and Gmo is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Managed Futures and Gmo Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Markets and Guggenheim Managed 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 Guggenheim Managed Futures 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 Markets has no effect on the direction of Guggenheim Managed i.e., Guggenheim Managed and Gmo Emerging go up and down completely randomly.
Pair Corralation between Guggenheim Managed and Gmo Emerging
Assuming the 90 days horizon Guggenheim Managed is expected to generate 2.5 times less return on investment than Gmo Emerging. But when comparing it to its historical volatility, Guggenheim Managed Futures is 1.04 times less risky than Gmo Emerging. It trades about 0.01 of its potential returns per unit of risk. Gmo Emerging Markets is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,118 in Gmo Emerging Markets on October 9, 2024 and sell it today you would earn a total of 198.00 from holding Gmo Emerging Markets or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Managed Futures vs. Gmo Emerging Markets
Performance |
| Timeline |
| Guggenheim Managed |
| Gmo Emerging Markets |
Guggenheim Managed and Gmo Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Managed and Gmo Emerging
The main advantage of trading using opposite Guggenheim Managed and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Managed 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.| Guggenheim Managed vs. Lord Abbett Health | Guggenheim Managed vs. The Gabelli Healthcare | Guggenheim Managed vs. The Hartford Healthcare | Guggenheim Managed vs. Live Oak Health |
| Gmo Emerging vs. Ashmore Emerging Markets | Gmo Emerging vs. Mid Cap 15x Strategy | Gmo Emerging vs. Eagle Mlp Strategy | Gmo Emerging vs. Nasdaq 100 2x Strategy |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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