Correlation Between Newlake Capital and Gmo Opportunistic

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

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

Diversification Opportunities for Newlake Capital and Gmo Opportunistic

0.0

Correlation Coefficient

Newlake Capital  Gmo Opportunistic

Pay attention - limited upside

The 3 months correlation between Newlake and Gmo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Newlake Capital Partners and Gmo Opportunistic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Opportunistic and Newlake Capital 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 Newlake Capital Partners are associated (or correlated) with Gmo Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Opportunistic has no effect on the direction of Newlake Capital i.e., Newlake Capital and Gmo Opportunistic go up and down completely randomly.

Pair Corralation between Newlake Capital and Gmo Opportunistic

If you would invest  1,583  in Newlake Capital Partners on January 18, 2024 and sell it today you would earn a total of  194.00  from holding Newlake Capital Partners or generate 12.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Newlake Capital Partners  vs.  Gmo Opportunistic Income

Newlake Capital Partners

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Newlake Capital Partners are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak fundamental indicators, Newlake Capital may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Gmo Opportunistic

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gmo Opportunistic Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gmo Opportunistic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Newlake Capital and Gmo Opportunistic

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

The idea behind Newlake Capital Partners and Gmo Opportunistic Income 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.