Correlation Between Gamco Global and Mainstay Moderate
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Mainstay Moderate 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 Mainstay Moderate 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 Mainstay Moderate Growth, you can compare the effects of market volatilities on Gamco Global and Mainstay Moderate 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 Mainstay Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Mainstay Moderate.
Diversification Opportunities for Gamco Global and Mainstay Moderate
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gamco and MAINSTAY is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Telecommunication and Mainstay Moderate Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Moderate Growth 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 Mainstay Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Moderate Growth has no effect on the direction of Gamco Global i.e., Gamco Global and Mainstay Moderate go up and down completely randomly.
Pair Corralation between Gamco Global and Mainstay Moderate
Assuming the 90 days horizon Gamco Global Telecommunications is expected to generate 1.34 times more return on investment than Mainstay Moderate. However, Gamco Global is 1.34 times more volatile than Mainstay Moderate Growth. It trades about 0.1 of its potential returns per unit of risk. Mainstay Moderate Growth is currently generating about 0.08 per unit of risk. If you would invest 1,542 in Gamco Global Telecommunications on August 30, 2024 and sell it today you would earn a total of 780.00 from holding Gamco Global Telecommunications or generate 50.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco Global Telecommunication vs. Mainstay Moderate Growth
Performance |
| Timeline |
| Gamco Global Telecom |
| Mainstay Moderate Growth |
Gamco Global and Mainstay Moderate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Mainstay Moderate
The main advantage of trading using opposite Gamco Global and Mainstay Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Mainstay Moderate 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 Mainstay Moderate will offset losses from the drop in Mainstay Moderate's long position.| Gamco Global vs. Jhancock Diversified Macro | Gamco Global vs. Pioneer Diversified High | Gamco Global vs. Western Asset Diversified | Gamco Global vs. Massmutual Select Diversified |
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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