Correlation Between Gmo Emerging and The Gold
Can any of the company-specific risk be diversified away by investing in both Gmo Emerging and The Gold 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 Emerging and The Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo Emerging Markets and The Gold Bullion, you can compare the effects of market volatilities on Gmo Emerging and The Gold 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 Emerging with a short position of The Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Emerging and The Gold.
Diversification Opportunities for Gmo Emerging and The Gold
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gmo and The is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Emerging Markets and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion and Gmo Emerging 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 Emerging Markets are associated (or correlated) with The Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion has no effect on the direction of Gmo Emerging i.e., Gmo Emerging and The Gold go up and down completely randomly.
Pair Corralation between Gmo Emerging and The Gold
Assuming the 90 days horizon Gmo Emerging Markets is expected to generate 0.82 times more return on investment than The Gold. However, Gmo Emerging Markets is 1.22 times less risky than The Gold. It trades about 0.15 of its potential returns per unit of risk. The Gold Bullion is currently generating about 0.06 per unit of risk. If you would invest 2,381 in Gmo Emerging Markets on March 31, 2025 and sell it today you would earn a total of 300.00 from holding Gmo Emerging Markets or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo Emerging Markets vs. The Gold Bullion
Performance |
| Timeline |
| Gmo Emerging Markets |
| Gold Bullion |
Gmo Emerging and The Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo Emerging and The Gold
The main advantage of trading using opposite Gmo Emerging and The Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Emerging position performs unexpectedly, The Gold 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 The Gold will offset losses from the drop in The Gold's long position.| Gmo Emerging vs. Allianzgi Convertible Income | Gmo Emerging vs. Mainstay Vertible Fund | Gmo Emerging vs. Teton Vertible Securities | Gmo Emerging vs. Lord Abbett Vertible |
| The Gold vs. Quantified Market Leaders | The Gold vs. Quantified Managed Income | The Gold vs. Quantified Alternative Investment | The Gold vs. Quantified Stf Fund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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