Correlation Between GAMCO Global and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both GAMCO Global and Fidus Investment 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 Fidus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMCO Global Gold and Fidus Investment Corp, you can compare the effects of market volatilities on GAMCO Global and Fidus Investment 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and Fidus Investment.
Diversification Opportunities for GAMCO Global and Fidus Investment
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GAMCO and Fidus is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Gold are associated (or correlated) with Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of GAMCO Global i.e., GAMCO Global and Fidus Investment go up and down completely randomly.
Pair Corralation between GAMCO Global and Fidus Investment
Assuming the 90 days trading horizon GAMCO Global Gold is expected to under-perform the Fidus Investment. But the preferred stock apears to be less risky and, when comparing its historical volatility, GAMCO Global Gold is 1.66 times less risky than Fidus Investment. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Fidus Investment Corp is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 1,950 in Fidus Investment Corp on September 1, 2024 and sell it today you would earn a total of 179.00 from holding Fidus Investment Corp or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMCO Global Gold vs. Fidus Investment Corp
Performance |
| Timeline |
| GAMCO Global Gold |
| Fidus Investment Corp |
GAMCO Global and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Global and Fidus Investment
The main advantage of trading using opposite GAMCO Global and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Global position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment's long position.| GAMCO Global vs. The Gabelli Equity | GAMCO Global vs. The Gabelli Equity | GAMCO Global vs. General American Investors | GAMCO Global vs. The Gabelli Utility |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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