Correlation Between Summit Global and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Summit Global and Gmo Global 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 Summit Global and Gmo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Global Investments and Gmo Global Developed, you can compare the effects of market volatilities on Summit Global and Gmo Global 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 Summit Global with a short position of Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Global and Gmo Global.
Diversification Opportunities for Summit Global and Gmo Global
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and GMO is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Summit Global Investments and Gmo Global Developed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Developed and Summit Global 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 Summit Global Investments are associated (or correlated) with Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Developed has no effect on the direction of Summit Global i.e., Summit Global and Gmo Global go up and down completely randomly.
Pair Corralation between Summit Global and Gmo Global
Assuming the 90 days horizon Summit Global is expected to generate 6.22 times less return on investment than Gmo Global. But when comparing it to its historical volatility, Summit Global Investments is 1.17 times less risky than Gmo Global. It trades about 0.02 of its potential returns per unit of risk. Gmo Global Developed is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,585 in Gmo Global Developed on September 5, 2025 and sell it today you would earn a total of 573.00 from holding Gmo Global Developed or generate 22.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Global Investments vs. Gmo Global Developed
Performance |
| Timeline |
| Summit Global Investments |
| Gmo Global Developed |
Summit Global and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Global and Gmo Global
The main advantage of trading using opposite Summit Global and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Global position performs unexpectedly, Gmo Global 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 Global will offset losses from the drop in Gmo Global's long position.| Summit Global vs. Ab Municipal Bond | Summit Global vs. Arrow Managed Futures | Summit Global vs. Simt Multi Asset Inflation | Summit Global vs. Fidelity Sai Inflationfocused |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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