Correlation Between Gmo Emerging and Wasatch International

Can any of the company-specific risk be diversified away by investing in both Gmo Emerging and Wasatch International 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 Emerging and Wasatch International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gmo Emerging Markets and Wasatch International Opportunities, you can compare the effects of market volatilities on Gmo Emerging and Wasatch International 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 Emerging with a short position of Wasatch International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gmo Emerging and Wasatch International.

Diversification Opportunities for Gmo Emerging and Wasatch International

-0.6

Correlation Coefficient

Gmo Emerging  Wasatch International

Excellent diversification

The 3 months correlation between Gmo and Wasatch is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gmo Emerging Markets and Wasatch International Opportun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch International and Gmo 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 Gmo Emerging Markets are associated (or correlated) with Wasatch International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch International has no effect on the direction of Gmo Emerging i.e., Gmo Emerging and Wasatch International go up and down completely randomly.

Pair Corralation between Gmo Emerging and Wasatch International

Assuming the 90 days horizon Gmo Emerging Markets is expected to generate 1.36 times more return on investment than Wasatch International. However, Gmo Emerging is 1.36 times more volatile than Wasatch International Opportunities. It trades about 0.1 of its potential returns per unit of risk. Wasatch International Opportunities is currently generating about 0.02 per unit of risk. If you would invest  806.00  in Gmo Emerging Markets on August 5, 2025 and sell it today you would earn a total of  659.00  from holding Gmo Emerging Markets or generate 81.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Gmo Emerging Markets  vs.  Wasatch International Opportun

Gmo Emerging Markets

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo Emerging Markets are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gmo Emerging may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Wasatch International

Risk-Adjusted Performance

Weakest

Over the last 90 days Wasatch International Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Gmo Emerging and Wasatch International

The main advantage of trading using opposite Gmo Emerging and Wasatch International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gmo Emerging position performs unexpectedly, Wasatch International 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 Wasatch International will offset losses from the drop in Wasatch International's long position.

The idea behind Gmo Emerging Markets and Wasatch International Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.