Correlation Between Astar and Gmo Emerging

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

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

Diversification Opportunities for Astar and Gmo Emerging

0.5

Correlation Coefficient

Astar  Gmo Emerging

Very weak diversification

The 3 months correlation between Astar and Gmo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Gmo Emerging Domestic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Domestic and Astar 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 Astar 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 Domestic has no effect on the direction of Astar i.e., Astar and Gmo Emerging go up and down completely randomly.

Pair Corralation between Astar and Gmo Emerging

If you would invest  1,884  in Gmo Emerging Domestic on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Gmo Emerging Domestic or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Astar  vs.  Gmo Emerging Domestic

Astar

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gmo Emerging Domestic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gmo Emerging Domestic has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Gmo Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astar and Gmo Emerging

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

The idea behind Astar and Gmo Emerging Domestic 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.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.