Correlation Between GAMCO Natural and Aberdeen Income
Can any of the company-specific risk be diversified away by investing in both GAMCO Natural and Aberdeen Income 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 Natural and Aberdeen Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMCO Natural Resources and Aberdeen Income Credit, you can compare the effects of market volatilities on GAMCO Natural and Aberdeen Income 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 Natural with a short position of Aberdeen Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Natural and Aberdeen Income.
Diversification Opportunities for GAMCO Natural and Aberdeen Income
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GAMCO and Aberdeen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Natural Resources and Aberdeen Income Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Income Credit and GAMCO Natural 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 Natural Resources are associated (or correlated) with Aberdeen Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Income Credit has no effect on the direction of GAMCO Natural i.e., GAMCO Natural and Aberdeen Income go up and down completely randomly.
Pair Corralation between GAMCO Natural and Aberdeen Income
Assuming the 90 days trading horizon GAMCO Natural Resources is expected to under-perform the Aberdeen Income. But the preferred stock apears to be less risky and, when comparing its historical volatility, GAMCO Natural Resources is 2.86 times less risky than Aberdeen Income. The preferred stock trades about -0.23 of its potential returns per unit of risk. The Aberdeen Income Credit is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 2,438 in Aberdeen Income Credit on August 29, 2024 and sell it today you would lose (74.00) from holding Aberdeen Income Credit or give up 3.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMCO Natural Resources vs. Aberdeen Income Credit
Performance |
| Timeline |
| GAMCO Natural Resources |
| Aberdeen Income Credit |
GAMCO Natural and Aberdeen Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Natural and Aberdeen Income
The main advantage of trading using opposite GAMCO Natural and Aberdeen Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Natural position performs unexpectedly, Aberdeen Income 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 Aberdeen Income will offset losses from the drop in Aberdeen Income's long position.| GAMCO Natural vs. The Gabelli Multimedia | GAMCO Natural vs. The Gabelli Equity | GAMCO Natural vs. Virtus AllianzGI Convertible | GAMCO Natural vs. John Hancock Income |
| Aberdeen Income vs. The Gabelli Equity | Aberdeen Income vs. The Gabelli Equity | Aberdeen Income vs. The Gabelli Utility | Aberdeen Income vs. GAMCO Global Gold |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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