Correlation Between Gamco Global and Aqr International
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Aqr 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 Gamco Global and Aqr International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Global Telecommunications and Aqr International Defensive, you can compare the effects of market volatilities on Gamco Global and Aqr 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 Gamco Global with a short position of Aqr International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Aqr International.
Diversification Opportunities for Gamco Global and Aqr International
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamco and Aqr is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Telecommunication and Aqr International Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr International 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 Telecommunications are associated (or correlated) with Aqr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr International has no effect on the direction of Gamco Global i.e., Gamco Global and Aqr International go up and down completely randomly.
Pair Corralation between Gamco Global and Aqr International
Assuming the 90 days horizon Gamco Global Telecommunications is expected to generate 0.81 times more return on investment than Aqr International. However, Gamco Global Telecommunications is 1.24 times less risky than Aqr International. It trades about 0.32 of its potential returns per unit of risk. Aqr International Defensive is currently generating about 0.03 per unit of risk. If you would invest 2,273 in Gamco Global Telecommunications on September 5, 2024 and sell it today you would earn a total of 81.00 from holding Gamco Global Telecommunications or generate 3.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gamco Global Telecommunication vs. Aqr International Defensive
Performance |
| Timeline |
| Gamco Global Telecom |
| Aqr International |
Gamco Global and Aqr International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Aqr International
The main advantage of trading using opposite Gamco Global and Aqr International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Aqr 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 Aqr International will offset losses from the drop in Aqr International's long position.| Gamco Global vs. Gabelli Global Financial | Gamco Global vs. The Gabelli Equity | Gamco Global vs. The Gabelli Val | Gamco Global vs. Gabelli Media Mogul |
| Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr Large Cap | Aqr International vs. Aqr International Defensive | Aqr International vs. Aqr International Defensive |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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