Correlation Between Federated and Gmo Quality
Can any of the company-specific risk be diversified away by investing in both Federated and Gmo Quality 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 Federated and Gmo Quality into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated U S and Gmo Quality Fund, you can compare the effects of market volatilities on Federated and Gmo Quality 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 Federated with a short position of Gmo Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated and Gmo Quality.
Diversification Opportunities for Federated and Gmo Quality
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Gmo is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Federated U S and Gmo Quality Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Quality Fund and Federated 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 Federated U S are associated (or correlated) with Gmo Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Quality Fund has no effect on the direction of Federated i.e., Federated and Gmo Quality go up and down completely randomly.
Pair Corralation between Federated and Gmo Quality
Assuming the 90 days horizon Federated is expected to generate 2.87 times less return on investment than Gmo Quality. But when comparing it to its historical volatility, Federated U S is 5.47 times less risky than Gmo Quality. It trades about 0.21 of its potential returns per unit of risk. Gmo Quality Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,362 in Gmo Quality Fund on June 10, 2025 and sell it today you would earn a total of 140.00 from holding Gmo Quality Fund or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated U S vs. Gmo Quality Fund
Performance |
| Timeline |
| Federated U S |
| Gmo Quality Fund |
Federated and Gmo Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated and Gmo Quality
The main advantage of trading using opposite Federated and Gmo Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated position performs unexpectedly, Gmo Quality 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 Quality will offset losses from the drop in Gmo Quality's long position.| Federated vs. Invesco Gold Special | Federated vs. James Balanced Golden | Federated vs. Europac Gold Fund | Federated vs. Gold And Precious |
| Gmo Quality vs. Advent Claymore Convertible | Gmo Quality vs. Rationalpier 88 Convertible | Gmo Quality vs. Calamos Dynamic Convertible | Gmo Quality vs. Putnam Convertible Securities |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Transaction History View history of all your transactions and understand their impact on performance |