Correlation Between American Mutual and Gamco Natural
Can any of the company-specific risk be diversified away by investing in both American Mutual 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 American Mutual and Gamco Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Gamco Natural Resources, you can compare the effects of market volatilities on American Mutual 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 American Mutual with a short position of Gamco Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Gamco Natural.
Diversification Opportunities for American Mutual and Gamco Natural
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Gamco is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund 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 American Mutual 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 American Mutual Fund 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 American Mutual i.e., American Mutual and Gamco Natural go up and down completely randomly.
Pair Corralation between American Mutual and Gamco Natural
Assuming the 90 days horizon American Mutual Fund is expected to under-perform the Gamco Natural. But the mutual fund apears to be less risky and, when comparing its historical volatility, American Mutual Fund is 1.59 times less risky than Gamco Natural. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Gamco Natural Resources is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 632.00 in Gamco Natural Resources on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Gamco Natural Resources or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Gamco Natural Resources
Performance |
| Timeline |
| American Mutual |
| Gamco Natural Resources |
American Mutual and Gamco Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Gamco Natural
The main advantage of trading using opposite American Mutual and Gamco Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual 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.| American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund | American Mutual vs. Washington Mutual Investors | American Mutual vs. Aquagold International |
| Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard 500 Index | Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard Total Stock |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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