Correlation Between GAMCO Global and US Global
Can any of the company-specific risk be diversified away by investing in both GAMCO Global and US Global 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 US Global 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 US Global Investors, you can compare the effects of market volatilities on GAMCO Global and US Global 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 US Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and US Global.
Diversification Opportunities for GAMCO Global and US Global
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GAMCO and GROW is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and US Global Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Investors 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 US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Investors has no effect on the direction of GAMCO Global i.e., GAMCO Global and US Global go up and down completely randomly.
Pair Corralation between GAMCO Global and US Global
Assuming the 90 days trading horizon GAMCO Global Gold is expected to generate 0.55 times more return on investment than US Global. However, GAMCO Global Gold is 1.83 times less risky than US Global. It trades about 0.04 of its potential returns per unit of risk. US Global Investors is currently generating about -0.04 per unit of risk. If you would invest 2,047 in GAMCO Global Gold on September 3, 2024 and sell it today you would earn a total of 135.00 from holding GAMCO Global Gold or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.93% |
| Values | Daily Returns |
GAMCO Global Gold vs. US Global Investors
Performance |
| Timeline |
| GAMCO Global Gold |
| US Global Investors |
GAMCO Global and US Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Global and US Global
The main advantage of trading using opposite GAMCO Global and US Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Global position performs unexpectedly, US Global 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 US Global will offset losses from the drop in US Global's long position.| GAMCO Global vs. Oxford Lane Capital | GAMCO Global vs. OFS Credit | GAMCO Global vs. XOMA Corporation | GAMCO Global vs. Oxford Lane Capital |
| US Global vs. Gladstone Investment | US Global vs. PennantPark Floating Rate | US Global vs. Horizon Technology Finance | US Global vs. Stellus Capital Investment |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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