Correlation Between Sp Midcap and Gmo Emerging
Can any of the company-specific risk be diversified away by investing in both Sp Midcap 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 Sp Midcap and Gmo Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Midcap Index and Gmo Emerging Markets, you can compare the effects of market volatilities on Sp Midcap 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 Sp Midcap with a short position of Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Midcap and Gmo Emerging.
Diversification Opportunities for Sp Midcap and Gmo Emerging
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPMIX and Gmo is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sp Midcap Index 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 Sp Midcap 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 Sp Midcap Index 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 Sp Midcap i.e., Sp Midcap and Gmo Emerging go up and down completely randomly.
Pair Corralation between Sp Midcap and Gmo Emerging
Assuming the 90 days horizon Sp Midcap is expected to generate 1.17 times less return on investment than Gmo Emerging. In addition to that, Sp Midcap is 1.23 times more volatile than Gmo Emerging Markets. It trades about 0.17 of its total potential returns per unit of risk. Gmo Emerging Markets is currently generating about 0.24 per unit of volatility. If you would invest 2,515 in Gmo Emerging Markets on May 31, 2025 and sell it today you would earn a total of 284.00 from holding Gmo Emerging Markets or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Midcap Index vs. Gmo Emerging Markets
Performance |
| Timeline |
| Sp Midcap Index |
| Gmo Emerging Markets |
Sp Midcap and Gmo Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Midcap and Gmo Emerging
The main advantage of trading using opposite Sp Midcap and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Midcap 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.| Sp Midcap vs. Putnam Convertible Securities | Sp Midcap vs. Advent Claymore Convertible | Sp Midcap vs. Virtus Convertible | Sp Midcap vs. Allianzgi Convertible Income |
| Gmo Emerging vs. Us Government Securities | Gmo Emerging vs. Aig Government Money | Gmo Emerging vs. Franklin Adjustable Government | Gmo Emerging vs. Federated Government Income |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |