Correlation Between Gmo High and Federated Floating
Can any of the company-specific risk be diversified away by investing in both Gmo High and Federated Floating 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 High and Federated Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gmo High Yield and Federated Floating Rate, you can compare the effects of market volatilities on Gmo High and Federated Floating 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 High with a short position of Federated Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Federated Floating.
Diversification Opportunities for Gmo High and Federated Floating
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gmo and Federated is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Federated Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Floating Rate and Gmo High 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 High Yield are associated (or correlated) with Federated Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Floating Rate has no effect on the direction of Gmo High i.e., Gmo High and Federated Floating go up and down completely randomly.
Pair Corralation between Gmo High and Federated Floating
Assuming the 90 days horizon Gmo High Yield is expected to generate 1.77 times more return on investment than Federated Floating. However, Gmo High is 1.77 times more volatile than Federated Floating Rate. It trades about 0.34 of its potential returns per unit of risk. Federated Floating Rate is currently generating about 0.32 per unit of risk. If you would invest 1,681 in Gmo High Yield on April 23, 2025 and sell it today you would earn a total of 76.00 from holding Gmo High Yield or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Gmo High Yield vs. Federated Floating Rate
Performance |
| Timeline |
| Gmo High Yield |
| Federated Floating Rate |
Gmo High and Federated Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Federated Floating
The main advantage of trading using opposite Gmo High and Federated Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Federated Floating 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 Floating will offset losses from the drop in Federated Floating's long position.| Gmo High vs. Gmo Trust | Gmo High vs. Gmo Emerging Markets | Gmo High vs. Gmo Global Developed | Gmo High vs. Gmo International Opportunistic |
| Federated Floating vs. Rbc Emerging Markets | Federated Floating vs. Pace International Emerging | Federated Floating vs. Sa Emerging Markets | Federated Floating vs. Oberweis Emerging Growth |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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