Correlation Between Gmo High and Catalystaspect Enhanced
Can any of the company-specific risk be diversified away by investing in both Gmo High and Catalystaspect Enhanced 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 Catalystaspect Enhanced 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 Catalystaspect Enhanced Multi Asset, you can compare the effects of market volatilities on Gmo High and Catalystaspect Enhanced 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 Catalystaspect Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo High and Catalystaspect Enhanced.
Diversification Opportunities for Gmo High and Catalystaspect Enhanced
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gmo and Catalystaspect is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Gmo High Yield and Catalystaspect Enhanced Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystaspect Enhanced 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 Catalystaspect Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystaspect Enhanced has no effect on the direction of Gmo High i.e., Gmo High and Catalystaspect Enhanced go up and down completely randomly.
Pair Corralation between Gmo High and Catalystaspect Enhanced
Assuming the 90 days horizon Gmo High is expected to generate 2.35 times less return on investment than Catalystaspect Enhanced. But when comparing it to its historical volatility, Gmo High Yield is 4.38 times less risky than Catalystaspect Enhanced. It trades about 0.29 of its potential returns per unit of risk. Catalystaspect Enhanced Multi Asset is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 872.00 in Catalystaspect Enhanced Multi Asset on May 19, 2025 and sell it today you would earn a total of 62.00 from holding Catalystaspect Enhanced Multi Asset or generate 7.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Gmo High Yield vs. Catalystaspect Enhanced Multi
Performance |
Timeline |
Gmo High Yield |
Catalystaspect Enhanced |
Gmo High and Catalystaspect Enhanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gmo High and Catalystaspect Enhanced
The main advantage of trading using opposite Gmo High and Catalystaspect Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo High position performs unexpectedly, Catalystaspect Enhanced 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 Catalystaspect Enhanced will offset losses from the drop in Catalystaspect Enhanced's long position.Gmo High vs. Lord Abbett Inflation | Gmo High vs. Inflation Protected Bond Fund | Gmo High vs. Ab Bond Inflation | Gmo High vs. The Hartford Inflation |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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