Correlation Between GAMCO Global and Liberty Northwest
Can any of the company-specific risk be diversified away by investing in both GAMCO Global and Liberty Northwest 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 Liberty Northwest 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 Liberty Northwest Bancorp, you can compare the effects of market volatilities on GAMCO Global and Liberty Northwest 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 Liberty Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and Liberty Northwest.
Diversification Opportunities for GAMCO Global and Liberty Northwest
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GAMCO and Liberty is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Liberty Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Northwest Bancorp 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 Liberty Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Northwest Bancorp has no effect on the direction of GAMCO Global i.e., GAMCO Global and Liberty Northwest go up and down completely randomly.
Pair Corralation between GAMCO Global and Liberty Northwest
Assuming the 90 days trading horizon GAMCO Global Gold is expected to under-perform the Liberty Northwest. But the preferred stock apears to be less risky and, when comparing its historical volatility, GAMCO Global Gold is 1.75 times less risky than Liberty Northwest. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Liberty Northwest Bancorp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 535.00 in Liberty Northwest Bancorp on September 1, 2024 and sell it today you would earn a total of 5.00 from holding Liberty Northwest Bancorp or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GAMCO Global Gold vs. Liberty Northwest Bancorp
Performance |
| Timeline |
| GAMCO Global Gold |
| Liberty Northwest Bancorp |
GAMCO Global and Liberty Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Global and Liberty Northwest
The main advantage of trading using opposite GAMCO Global and Liberty Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Global position performs unexpectedly, Liberty Northwest 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 Liberty Northwest will offset losses from the drop in Liberty Northwest'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 |
| Liberty Northwest vs. Chester Mining | Liberty Northwest vs. GAMCO Global Gold | Liberty Northwest vs. Getty Copper | Liberty Northwest vs. Black Hills |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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