Correlation Between Gmo High and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Gmo High and Vanguard Total 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 Vanguard Total 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 Vanguard Total Bond, you can compare the effects of market volatilities on Gmo High and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Vanguard Total.
Diversification Opportunities for Gmo High and Vanguard Total
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gmo and Vanguard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Vanguard Total Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Bond 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Bond has no effect on the direction of Gmo High i.e., Gmo High and Vanguard Total go up and down completely randomly.
Pair Corralation between Gmo High and Vanguard Total
Assuming the 90 days horizon Gmo High Yield is expected to generate 0.52 times more return on investment than Vanguard Total. However, Gmo High Yield is 1.91 times less risky than Vanguard Total. It trades about 0.33 of its potential returns per unit of risk. Vanguard Total Bond is currently generating about 0.11 per unit of risk. If you would invest 1,730 in Gmo High Yield on June 4, 2025 and sell it today you would earn a total of 51.00 from holding Gmo High Yield or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gmo High Yield vs. Vanguard Total Bond
Performance |
| Timeline |
| Gmo High Yield |
| Vanguard Total Bond |
Gmo High and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gmo High and Vanguard Total
The main advantage of trading using opposite Gmo High and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| Gmo High vs. Msift High Yield | Gmo High vs. Columbia High Yield | Gmo High vs. Lord Abbett Short | Gmo High vs. Federated High Yield |
| Vanguard Total vs. Global Resources Fund | Vanguard Total vs. Ivy Natural Resources | Vanguard Total vs. Blackrock All Cap Energy | Vanguard Total vs. Goehring Rozencwajg Resources |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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