Correlation Between Gamco International and L Abbett
Can any of the company-specific risk be diversified away by investing in both Gamco International and L Abbett 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 L Abbett 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 L Abbett Growth, you can compare the effects of market volatilities on Gamco International and L Abbett 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 L Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco International and L Abbett.
Diversification Opportunities for Gamco International and L Abbett
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamco and LGLSX is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gamco International Growth and L Abbett Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on L Abbett 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 L Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of L Abbett Growth has no effect on the direction of Gamco International i.e., Gamco International and L Abbett go up and down completely randomly.
Pair Corralation between Gamco International and L Abbett
Assuming the 90 days horizon Gamco International Growth is expected to under-perform the L Abbett. But the mutual fund apears to be less risky and, when comparing its historical volatility, Gamco International Growth is 1.45 times less risky than L Abbett. The mutual fund trades about -0.01 of its potential returns per unit of risk. The L Abbett Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,646 in L Abbett Growth on October 27, 2024 and sell it today you would earn a total of 2,407 from holding L Abbett Growth or generate 90.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco International Growth vs. L Abbett Growth
Performance |
| Timeline |
| Gamco International |
| L Abbett Growth |
Gamco International and L Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco International and L Abbett
The main advantage of trading using opposite Gamco International and L Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco International position performs unexpectedly, L Abbett 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 L Abbett will offset losses from the drop in L Abbett's long position.| Gamco International vs. Shelton E Value | Gamco International vs. Growth Fund Of | Gamco International vs. Tfa Quantitative | Gamco International vs. Qs Growth Fund |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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