Correlation Between Bank of America and Gamco Global
Can any of the company-specific risk be diversified away by investing in both Bank of America 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 Bank of America and Gamco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Gamco Global, you can compare the effects of market volatilities on Bank of America 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 Bank of America with a short position of Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Gamco Global.
Diversification Opportunities for Bank of America and Gamco Global
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and Gamco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Gamco Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global and Bank of America 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 Bank of America 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 has no effect on the direction of Bank of America i.e., Bank of America and Gamco Global go up and down completely randomly.
Pair Corralation between Bank of America and Gamco Global
Considering the 90-day investment horizon Bank of America is expected to under-perform the Gamco Global. In addition to that, Bank of America is 1.73 times more volatile than Gamco Global. It trades about -0.2 of its total potential returns per unit of risk. Gamco Global is currently generating about 0.02 per unit of volatility. If you would invest 403.00 in Gamco Global on January 7, 2025 and sell it today you would earn a total of 1.00 from holding Gamco Global or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bank of America vs. Gamco Global
Performance |
| Timeline |
| Bank of America |
| Gamco Global |
Bank of America and Gamco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Gamco Global
The main advantage of trading using opposite Bank of America and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America 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.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| Gamco Global vs. Blackrock International Growth | Gamco Global vs. BlackRock Health Sciences | Gamco Global vs. Blackrock Enhanced Capital | Gamco Global vs. Guggenheim Taxable Municipal |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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