Correlation Between Gamco Global and Sparta Capital
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Sparta Capital 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 Gamco Global and Sparta Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Global Opportunity and Sparta Capital, you can compare the effects of market volatilities on Gamco Global and Sparta Capital 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 Gamco Global with a short position of Sparta Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Sparta Capital.
Diversification Opportunities for Gamco Global and Sparta Capital
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and Sparta is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Opportunity and Sparta Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparta Capital and Gamco Global 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 Gamco Global Opportunity are associated (or correlated) with Sparta Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparta Capital has no effect on the direction of Gamco Global i.e., Gamco Global and Sparta Capital go up and down completely randomly.
Pair Corralation between Gamco Global and Sparta Capital
Assuming the 90 days horizon Gamco Global Opportunity is expected to generate 0.42 times more return on investment than Sparta Capital. However, Gamco Global Opportunity is 2.4 times less risky than Sparta Capital. It trades about -0.02 of its potential returns per unit of risk. Sparta Capital is currently generating about -0.09 per unit of risk. If you would invest 1,213 in Gamco Global Opportunity on August 28, 2024 and sell it today you would lose (30.00) from holding Gamco Global Opportunity or give up 2.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Gamco Global Opportunity vs. Sparta Capital
Performance |
| Timeline |
| Gamco Global Opportunity |
| Sparta Capital |
Gamco Global and Sparta Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Sparta Capital
The main advantage of trading using opposite Gamco Global and Sparta Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Sparta Capital 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 Sparta Capital will offset losses from the drop in Sparta Capital's long position.| Gamco Global vs. Pgim Jennison Technology | Gamco Global vs. Mfs Technology Fund | Gamco Global vs. Technology Ultrasector Profund | Gamco Global vs. Global Technology Portfolio |
| Sparta Capital vs. Copa Holdings SA | Sparta Capital vs. United Airlines Holdings | Sparta Capital vs. Delta Air Lines | Sparta Capital vs. SkyWest |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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