Correlation Between Gamco International and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Gamco International and Franklin Growth 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 International and Franklin Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco International Growth and Franklin Growth Opportunities, you can compare the effects of market volatilities on Gamco International and Franklin Growth 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 International with a short position of Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco International and Franklin Growth.
Diversification Opportunities for Gamco International and Franklin Growth
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamco and Franklin is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Gamco International Growth and Franklin Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Oppo and Gamco International 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 International Growth are associated (or correlated) with Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Oppo has no effect on the direction of Gamco International i.e., Gamco International and Franklin Growth go up and down completely randomly.
Pair Corralation between Gamco International and Franklin Growth
Assuming the 90 days horizon Gamco International Growth is expected to generate 0.78 times more return on investment than Franklin Growth. However, Gamco International Growth is 1.29 times less risky than Franklin Growth. It trades about -0.33 of its potential returns per unit of risk. Franklin Growth Opportunities is currently generating about -0.31 per unit of risk. If you would invest 1,970 in Gamco International Growth on October 12, 2024 and sell it today you would lose (188.00) from holding Gamco International Growth or give up 9.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco International Growth vs. Franklin Growth Opportunities
Performance |
| Timeline |
| Gamco International |
| Franklin Growth Oppo |
Gamco International and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco International and Franklin Growth
The main advantage of trading using opposite Gamco International and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco International position performs unexpectedly, Franklin Growth 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 Franklin Growth will offset losses from the drop in Franklin Growth's long position.| Gamco International vs. Victory Incore Investment | Gamco International vs. Invesco Vertible Securities | Gamco International vs. Rationalpier 88 Convertible | Gamco International vs. Lord Abbett Vertible |
| Franklin Growth vs. Goldman Sachs Real | Franklin Growth vs. Dunham Real Estate | Franklin Growth vs. Deutsche Real Estate | Franklin Growth vs. Tiaa Cref Real Estate |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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