Correlation Between Guinness Atkinson and Gamco Natural
Can any of the company-specific risk be diversified away by investing in both Guinness Atkinson 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 Guinness Atkinson and Gamco Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guinness Atkinson Alternative and Gamco Natural Resources, you can compare the effects of market volatilities on Guinness Atkinson 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 Guinness Atkinson with a short position of Gamco Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guinness Atkinson and Gamco Natural.
Diversification Opportunities for Guinness Atkinson and Gamco Natural
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guinness and Gamco is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Guinness Atkinson Alternative 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 Guinness Atkinson 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 Guinness Atkinson Alternative 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 Guinness Atkinson i.e., Guinness Atkinson and Gamco Natural go up and down completely randomly.
Pair Corralation between Guinness Atkinson and Gamco Natural
Assuming the 90 days horizon Guinness Atkinson Alternative is expected to generate 1.42 times more return on investment than Gamco Natural. However, Guinness Atkinson is 1.42 times more volatile than Gamco Natural Resources. It trades about -0.06 of its potential returns per unit of risk. Gamco Natural Resources is currently generating about -0.11 per unit of risk. If you would invest 559.00 in Guinness Atkinson Alternative on September 1, 2024 and sell it today you would lose (8.00) from holding Guinness Atkinson Alternative or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guinness Atkinson Alternative vs. Gamco Natural Resources
Performance |
| Timeline |
| Guinness Atkinson |
| Gamco Natural Resources |
Guinness Atkinson and Gamco Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guinness Atkinson and Gamco Natural
The main advantage of trading using opposite Guinness Atkinson and Gamco Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guinness Atkinson 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.| Guinness Atkinson vs. New Alternatives Fund | Guinness Atkinson vs. Calvert Global Energy | Guinness Atkinson vs. Firsthand Alternative Energy | Guinness Atkinson vs. Guinness Atkinson Global |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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