Correlation Between Gamco Global and First Investors
Can any of the company-specific risk be diversified away by investing in both Gamco Global and First Investors 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 First Investors 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 First Investors Opportunity, you can compare the effects of market volatilities on Gamco Global and First Investors 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 First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and First Investors.
Diversification Opportunities for Gamco Global and First Investors
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and First is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Telecommunication and First Investors Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Oppo 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 First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Oppo has no effect on the direction of Gamco Global i.e., Gamco Global and First Investors go up and down completely randomly.
Pair Corralation between Gamco Global and First Investors
Assuming the 90 days horizon Gamco Global Telecommunications is expected to generate 0.92 times more return on investment than First Investors. However, Gamco Global Telecommunications is 1.09 times less risky than First Investors. It trades about 0.11 of its potential returns per unit of risk. First Investors Opportunity is currently generating about 0.06 per unit of risk. If you would invest 1,515 in Gamco Global Telecommunications on September 14, 2024 and sell it today you would earn a total of 879.00 from holding Gamco Global Telecommunications or generate 58.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gamco Global Telecommunication vs. First Investors Opportunity
Performance |
| Timeline |
| Gamco Global Telecom |
| First Investors Oppo |
Gamco Global and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and First Investors
The main advantage of trading using opposite Gamco Global and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, First Investors 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 First Investors will offset losses from the drop in First Investors' long position.| Gamco Global vs. Ab Global Real | Gamco Global vs. Dreyfusstandish Global Fixed | Gamco Global vs. Siit Global Managed | Gamco Global vs. Artisan Global Unconstrained |
| First Investors vs. Optimum Small Mid Cap | First Investors vs. Optimum Small Mid Cap | First Investors vs. Ivy Apollo Multi Asset | First Investors vs. Optimum Fixed Income |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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