Correlation Between Acme United and GAMCO Global
Can any of the company-specific risk be diversified away by investing in both Acme United and GAMCO Global 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 Acme United and GAMCO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Acme United and GAMCO Global Gold, you can compare the effects of market volatilities on Acme United and GAMCO Global 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 Acme United with a short position of GAMCO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Acme United and GAMCO Global.
Diversification Opportunities for Acme United and GAMCO Global
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Acme and GAMCO is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Acme United and GAMCO Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Global Gold and Acme United 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 Acme United are associated (or correlated) with GAMCO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMCO Global Gold has no effect on the direction of Acme United i.e., Acme United and GAMCO Global go up and down completely randomly.
Pair Corralation between Acme United and GAMCO Global
Considering the 90-day investment horizon Acme United is expected to generate 3.85 times more return on investment than GAMCO Global. However, Acme United is 3.85 times more volatile than GAMCO Global Gold. It trades about 0.3 of its potential returns per unit of risk. GAMCO Global Gold is currently generating about 0.02 per unit of risk. If you would invest 3,966 in Acme United on September 2, 2024 and sell it today you would earn a total of 485.00 from holding Acme United or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Acme United vs. GAMCO Global Gold
Performance |
| Timeline |
| Acme United |
| GAMCO Global Gold |
Acme United and GAMCO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Acme United and GAMCO Global
The main advantage of trading using opposite Acme United and GAMCO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acme United position performs unexpectedly, GAMCO Global 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 GAMCO Global will offset losses from the drop in GAMCO Global's long position.| Acme United vs. Mannatech Incorporated | Acme United vs. European Wax Center | Acme United vs. Inter Parfums | Acme United vs. Spectrum Brands Holdings |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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