Correlation Between Gamco International and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Gamco International and The Gabelli 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 The Gabelli 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 The Gabelli Growth, you can compare the effects of market volatilities on Gamco International and The Gabelli 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 The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco International and The Gabelli.
Diversification Opportunities for Gamco International and The Gabelli
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gamco and The is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gamco International Growth and The Gabelli Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Growth 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 The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Growth has no effect on the direction of Gamco International i.e., Gamco International and The Gabelli go up and down completely randomly.
Pair Corralation between Gamco International and The Gabelli
Assuming the 90 days horizon Gamco International is expected to generate 17.72 times less return on investment than The Gabelli. But when comparing it to its historical volatility, Gamco International Growth is 1.23 times less risky than The Gabelli. It trades about 0.01 of its potential returns per unit of risk. The Gabelli Growth is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 8,030 in The Gabelli Growth on August 26, 2024 and sell it today you would earn a total of 4,220 from holding The Gabelli Growth or generate 52.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco International Growth vs. The Gabelli Growth
Performance |
| Timeline |
| Gamco International |
| Gabelli Growth |
Gamco International and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco International and The Gabelli
The main advantage of trading using opposite Gamco International and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco International position performs unexpectedly, The Gabelli 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 The Gabelli will offset losses from the drop in The Gabelli's long position.| Gamco International vs. Artisan High Income | Gamco International vs. Pace High Yield | Gamco International vs. Virtus High Yield | Gamco International vs. Prudential High Yield |
| The Gabelli vs. Gabelli Esg Fund | The Gabelli vs. Gabelli Global Financial | The Gabelli vs. The Gabelli Equity | The Gabelli vs. Gamco International Growth |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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