Correlation Between American Funds and Gamco International
Can any of the company-specific risk be diversified away by investing in both American Funds and Gamco International 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 Funds and Gamco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Inflation and Gamco International Growth, you can compare the effects of market volatilities on American Funds and Gamco International 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 Funds with a short position of Gamco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Gamco International.
Diversification Opportunities for American Funds and Gamco International
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Gamco is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Inflation and Gamco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco International and American Funds 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 Funds Inflation are associated (or correlated) with Gamco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco International has no effect on the direction of American Funds i.e., American Funds and Gamco International go up and down completely randomly.
Pair Corralation between American Funds and Gamco International
Assuming the 90 days horizon American Funds Inflation is expected to generate 0.27 times more return on investment than Gamco International. However, American Funds Inflation is 3.69 times less risky than Gamco International. It trades about 0.15 of its potential returns per unit of risk. Gamco International Growth is currently generating about -0.12 per unit of risk. If you would invest 936.00 in American Funds Inflation on September 2, 2024 and sell it today you would earn a total of 7.00 from holding American Funds Inflation or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Inflation vs. Gamco International Growth
Performance |
| Timeline |
| American Funds Inflation |
| Gamco International |
American Funds and Gamco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Gamco International
The main advantage of trading using opposite American Funds and Gamco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Gamco International 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 International will offset losses from the drop in Gamco International's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| Gamco International vs. Arrow Managed Futures | Gamco International vs. Scharf Global Opportunity | Gamco International vs. T Rowe Price | Gamco International vs. Ab Value Fund |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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