Correlation Between Mondrian Emerging and Gmo Emerging
Can any of the company-specific risk be diversified away by investing in both Mondrian Emerging and Gmo Emerging 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 Mondrian Emerging and Gmo Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mondrian Emerging Markets and Gmo Emerging Markets, you can compare the effects of market volatilities on Mondrian Emerging and Gmo Emerging 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 Mondrian Emerging with a short position of Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mondrian Emerging and Gmo Emerging.
Diversification Opportunities for Mondrian Emerging and Gmo Emerging
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mondrian and Gmo is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mondrian Emerging Markets and Gmo Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Emerging Markets and Mondrian 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 Mondrian Emerging Markets are associated (or correlated) with Gmo Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Emerging Markets has no effect on the direction of Mondrian Emerging i.e., Mondrian Emerging and Gmo Emerging go up and down completely randomly.
Pair Corralation between Mondrian Emerging and Gmo Emerging
Assuming the 90 days horizon Mondrian Emerging Markets is expected to generate about the same return on investment as Gmo Emerging Markets. But, Mondrian Emerging Markets is 1.14 times less risky than Gmo Emerging. It trades about 0.31 of its potential returns per unit of risk. Gmo Emerging Markets is currently generating about 0.27 per unit of risk. If you would invest 1,188 in Gmo Emerging Markets on May 1, 2025 and sell it today you would earn a total of 151.00 from holding Gmo Emerging Markets or generate 12.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mondrian Emerging Markets vs. Gmo Emerging Markets
Performance |
| Timeline |
| Mondrian Emerging Markets |
| Gmo Emerging Markets |
Mondrian Emerging and Gmo Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mondrian Emerging and Gmo Emerging
The main advantage of trading using opposite Mondrian Emerging and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mondrian Emerging position performs unexpectedly, Gmo Emerging 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 Emerging will offset losses from the drop in Gmo Emerging's long position.| Mondrian Emerging vs. Boston Partners Small | Mondrian Emerging vs. Valic Company I | Mondrian Emerging vs. Ab Discovery Value | Mondrian Emerging vs. Applied Finance Explorer |
| Gmo Emerging vs. Easterly Snow Longshort | Gmo Emerging vs. Aqr Sustainable Long Short | Gmo Emerging vs. Chartwell Short Duration | Gmo Emerging vs. Western Asset Short |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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