Correlation Between Gmo Resources and Federated Strategic
Can any of the company-specific risk be diversified away by investing in both Gmo Resources and Federated Strategic 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 Gmo Resources and Federated Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Resources and Federated Strategic Value, you can compare the effects of market volatilities on Gmo Resources and Federated Strategic 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 Gmo Resources with a short position of Federated Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Resources and Federated Strategic.
Diversification Opportunities for Gmo Resources and Federated Strategic
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Federated is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Resources and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value and Gmo Resources 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 Gmo Resources are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Gmo Resources i.e., Gmo Resources and Federated Strategic go up and down completely randomly.
Pair Corralation between Gmo Resources and Federated Strategic
Assuming the 90 days horizon Gmo Resources is expected to under-perform the Federated Strategic. In addition to that, Gmo Resources is 1.82 times more volatile than Federated Strategic Value. It trades about -0.03 of its total potential returns per unit of risk. Federated Strategic Value is currently generating about 0.03 per unit of volatility. If you would invest 544.00 in Federated Strategic Value on September 26, 2024 and sell it today you would earn a total of 49.00 from holding Federated Strategic Value or generate 9.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.8% |
Values | Daily Returns |
Gmo Resources vs. Federated Strategic Value
Performance |
Timeline |
Gmo Resources |
Federated Strategic Value |
Gmo Resources and Federated Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gmo Resources and Federated Strategic
The main advantage of trading using opposite Gmo Resources and Federated Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Resources position performs unexpectedly, Federated Strategic 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 Federated Strategic will offset losses from the drop in Federated Strategic's long position.Gmo Resources vs. Gmo E Plus | Gmo Resources vs. Gmo Trust | Gmo Resources vs. Gmo Treasury Fund | Gmo Resources vs. Gmo Emerging Markets |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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