Correlation Between ANT and Gmo Global

Can any of the company-specific risk be diversified away by investing in both ANT 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 ANT and Gmo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ANT and Gmo Global Equity, you can compare the effects of market volatilities on ANT 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 ANT with a short position of Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and Gmo Global.

Diversification Opportunities for ANT and Gmo Global

0.06

Correlation Coefficient

ANT  Gmo Global

Significant diversification

The 3 months correlation between ANT and Gmo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ANT 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 ANT 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 ANT 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 ANT i.e., ANT and Gmo Global go up and down completely randomly.

Pair Corralation between ANT and Gmo Global

Assuming the 90 days trading horizon ANT is expected to generate 95.49 times more return on investment than Gmo Global. However, ANT is 95.49 times more volatile than Gmo Global Equity. It trades about 0.12 of its potential returns per unit of risk. Gmo Global Equity is currently generating about 0.04 per unit of risk. If you would invest  933.00  in ANT on October 9, 2024 and sell it today you would lose (786.00) from holding ANT or give up 84.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	66.8%
Values	Daily Returns

ANT  vs.  Gmo Global Equity

ANT

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ANT are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, ANT exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gmo Global Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gmo Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with ANT and Gmo Global

The main advantage of trading using opposite ANT and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT 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.

The idea behind ANT and Gmo Global Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.