Correlation Between Midas Fund and Gmo Quality

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

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

Diversification Opportunities for Midas Fund and Gmo Quality

0.88

Correlation Coefficient

Midas Fund  Gmo Quality

Very poor diversification

The 3 months correlation between Midas and Gmo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Midas Fund Midas and Gmo Quality Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Quality Fund and Midas Fund 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 Midas Fund Midas are associated (or correlated) with Gmo Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Quality Fund has no effect on the direction of Midas Fund i.e., Midas Fund and Gmo Quality go up and down completely randomly.

Pair Corralation between Midas Fund and Gmo Quality

Assuming the 90 days horizon Midas Fund Midas is expected to generate 3.28 times more return on investment than Gmo Quality. However, Midas Fund is 3.28 times more volatile than Gmo Quality Fund. It trades about 0.31 of its potential returns per unit of risk. Gmo Quality Fund is currently generating about 0.1 per unit of risk. If you would invest  211.00  in Midas Fund Midas on July 3, 2025 and sell it today you would earn a total of  83.00  from holding Midas Fund Midas or generate 39.34% return on investment over 90 days.

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

Midas Fund Midas  vs.  Gmo Quality Fund

Midas Fund Midas

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Midas Fund Midas are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Midas Fund showed solid returns over the last few months and may actually be approaching a breakup point.

Gmo Quality Fund

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo Quality Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gmo Quality is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Midas Fund and Gmo Quality

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

The idea behind Midas Fund Midas and Gmo Quality Fund 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.