Correlation Between Gamco International and Templeton Growth
Can any of the company-specific risk be diversified away by investing in both Gamco International and Templeton 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 Templeton 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 Templeton Growth Fund, you can compare the effects of market volatilities on Gamco International and Templeton 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 Templeton Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco International and Templeton Growth.
Diversification Opportunities for Gamco International and Templeton Growth
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and Templeton is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gamco International Growth and Templeton Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton 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 Templeton Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Growth has no effect on the direction of Gamco International i.e., Gamco International and Templeton Growth go up and down completely randomly.
Pair Corralation between Gamco International and Templeton Growth
Assuming the 90 days horizon Gamco International Growth is expected to under-perform the Templeton Growth. In addition to that, Gamco International is 1.25 times more volatile than Templeton Growth Fund. It trades about -0.01 of its total potential returns per unit of risk. Templeton Growth Fund is currently generating about 0.05 per unit of volatility. If you would invest 2,231 in Templeton Growth Fund on October 27, 2024 and sell it today you would earn a total of 460.00 from holding Templeton Growth Fund or generate 20.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco International Growth vs. Templeton Growth Fund
Performance |
| Timeline |
| Gamco International |
| Templeton Growth |
Gamco International and Templeton Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco International and Templeton Growth
The main advantage of trading using opposite Gamco International and Templeton Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco International position performs unexpectedly, Templeton 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 Templeton Growth will offset losses from the drop in Templeton Growth'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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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