Correlation Between Gamco Global and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Ashmore Emerging 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 Ashmore Emerging 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 Ashmore Emerging Markets, you can compare the effects of market volatilities on Gamco Global and Ashmore Emerging 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 Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Ashmore Emerging.
Diversification Opportunities for Gamco Global and Ashmore Emerging
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamco and Ashmore is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Telecommunication and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets 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 Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Gamco Global i.e., Gamco Global and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Gamco Global and Ashmore Emerging
Assuming the 90 days horizon Gamco Global Telecommunications is expected to generate 0.7 times more return on investment than Ashmore Emerging. However, Gamco Global Telecommunications is 1.43 times less risky than Ashmore Emerging. It trades about 0.26 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.11 per unit of risk. If you would invest 2,313 in Gamco Global Telecommunications on September 13, 2024 and sell it today you would earn a total of 61.00 from holding Gamco Global Telecommunications or generate 2.64% 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. Ashmore Emerging Markets
Performance |
| Timeline |
| Gamco Global Telecom |
| Ashmore Emerging Markets |
Gamco Global and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Ashmore Emerging
The main advantage of trading using opposite Gamco Global and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging's long position.| Gamco Global vs. Fidelity Small Cap | Gamco Global vs. Victory Rs Partners | Gamco Global vs. Lsv Small Cap | Gamco Global vs. Mutual Of America |
| Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets | Ashmore Emerging vs. Ashmore Emerging Markets |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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