Correlation Between Wasatch Emerging and Gmo Emerging
Can any of the company-specific risk be diversified away by investing in both Wasatch 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 Wasatch 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 Wasatch Emerging Markets and Gmo Emerging Markets, you can compare the effects of market volatilities on Wasatch 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 Wasatch Emerging with a short position of Gmo Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Emerging and Gmo Emerging.
Diversification Opportunities for Wasatch Emerging and Gmo Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wasatch and Gmo is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch 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 Wasatch 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 Wasatch 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 Wasatch Emerging i.e., Wasatch Emerging and Gmo Emerging go up and down completely randomly.
Pair Corralation between Wasatch Emerging and Gmo Emerging
Assuming the 90 days horizon Wasatch Emerging is expected to generate 2.9 times less return on investment than Gmo Emerging. In addition to that, Wasatch Emerging is 1.11 times more volatile than Gmo Emerging Markets. It trades about 0.07 of its total potential returns per unit of risk. Gmo Emerging Markets is currently generating about 0.23 per unit of volatility. If you would invest 1,205 in Gmo Emerging Markets on May 2, 2025 and sell it today you would earn a total of 124.00 from holding Gmo Emerging Markets or generate 10.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wasatch Emerging Markets vs. Gmo Emerging Markets
Performance |
| Timeline |
| Wasatch Emerging Markets |
| Gmo Emerging Markets |
Wasatch Emerging and Gmo Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wasatch Emerging and Gmo Emerging
The main advantage of trading using opposite Wasatch Emerging and Gmo Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch 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.| Wasatch Emerging vs. Dws Government Money | Wasatch Emerging vs. John Hancock Money | Wasatch Emerging vs. Hsbc Treasury Money | Wasatch Emerging vs. Tiaa Cref Life Money |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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