Correlation Between GAMCO Global and Royalty Management
Can any of the company-specific risk be diversified away by investing in both GAMCO Global and Royalty Management 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 Royalty Management 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 Royalty Management Holding, you can compare the effects of market volatilities on GAMCO Global and Royalty Management 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 Royalty Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and Royalty Management.
Diversification Opportunities for GAMCO Global and Royalty Management
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GAMCO and Royalty is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Royalty Management Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royalty Management 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 Royalty Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royalty Management has no effect on the direction of GAMCO Global i.e., GAMCO Global and Royalty Management go up and down completely randomly.
Pair Corralation between GAMCO Global and Royalty Management
Assuming the 90 days trading horizon GAMCO Global Gold is expected to generate 0.13 times more return on investment than Royalty Management. However, GAMCO Global Gold is 7.71 times less risky than Royalty Management. It trades about 0.0 of its potential returns per unit of risk. Royalty Management Holding is currently generating about -0.02 per unit of risk. If you would invest 2,093 in GAMCO Global Gold on September 20, 2024 and sell it today you would lose (35.00) from holding GAMCO Global Gold or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 93.95% |
| Values | Daily Returns |
GAMCO Global Gold vs. Royalty Management Holding
Performance |
| Timeline |
| GAMCO Global Gold |
| Royalty Management |
GAMCO Global and Royalty Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Global and Royalty Management
The main advantage of trading using opposite GAMCO Global and Royalty Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Global position performs unexpectedly, Royalty Management 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 Royalty Management will offset losses from the drop in Royalty Management'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 |
| Royalty Management vs. Visa Class A | Royalty Management vs. Deutsche Bank AG | Royalty Management vs. Dynex Capital |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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