Correlation Between Gamco Global and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Sterling 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 Sterling Capital 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 Sterling Capital Securitized, you can compare the effects of market volatilities on Gamco Global and Sterling 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Sterling Capital.
Diversification Opportunities for Gamco Global and Sterling Capital
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GAMCO and Sterling is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Telecommunication and Sterling Capital Securitized in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Sec 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Sec has no effect on the direction of Gamco Global i.e., Gamco Global and Sterling Capital go up and down completely randomly.
Pair Corralation between Gamco Global and Sterling Capital
Assuming the 90 days horizon Gamco Global Telecommunications is expected to generate 2.56 times more return on investment than Sterling Capital. However, Gamco Global is 2.56 times more volatile than Sterling Capital Securitized. It trades about 0.12 of its potential returns per unit of risk. Sterling Capital Securitized is currently generating about 0.1 per unit of risk. If you would invest 2,099 in Gamco Global Telecommunications on September 1, 2024 and sell it today you would earn a total of 243.00 from holding Gamco Global Telecommunications or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Gamco Global Telecommunication vs. Sterling Capital Securitized
Performance |
| Timeline |
| Gamco Global Telecom |
| Sterling Capital Sec |
Gamco Global and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Sterling Capital
The main advantage of trading using opposite Gamco Global and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Sterling 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Gamco Global vs. Chartwell Short Duration | Gamco Global vs. Ab Select Longshort | Gamco Global vs. Franklin Federal Limited Term | Gamco Global vs. Maryland Short Term Tax Free |
| Sterling Capital vs. Sterling Capital Equity | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral | Sterling Capital vs. Sterling Capital Behavioral |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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