Correlation Between Firsthand Alternative and Gamco Natural
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Gamco Natural 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 Firsthand Alternative and Gamco Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Gamco Natural Resources, you can compare the effects of market volatilities on Firsthand Alternative and Gamco Natural 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 Firsthand Alternative with a short position of Gamco Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Gamco Natural.
Diversification Opportunities for Firsthand Alternative and Gamco Natural
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Firsthand and GAMCO is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Gamco Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Natural Resources and Firsthand Alternative 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 Firsthand Alternative Energy are associated (or correlated) with Gamco Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Natural Resources has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Gamco Natural go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Gamco Natural
Assuming the 90 days horizon Firsthand Alternative is expected to generate 1.78 times less return on investment than Gamco Natural. In addition to that, Firsthand Alternative is 2.48 times more volatile than Gamco Natural Resources. It trades about 0.02 of its total potential returns per unit of risk. Gamco Natural Resources is currently generating about 0.1 per unit of volatility. If you would invest 568.00 in Gamco Natural Resources on August 27, 2024 and sell it today you would earn a total of 81.00 from holding Gamco Natural Resources or generate 14.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Gamco Natural Resources
Performance |
| Timeline |
| Firsthand Alternative |
| Gamco Natural Resources |
Firsthand Alternative and Gamco Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Gamco Natural
The main advantage of trading using opposite Firsthand Alternative and Gamco Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Gamco Natural 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 Natural will offset losses from the drop in Gamco Natural's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
| Gamco Natural vs. Georgia Tax Free Bond | Gamco Natural vs. T Rowe Price | Gamco Natural vs. Bbh Intermediate Municipal | Gamco Natural vs. Metropolitan West Porate |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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