Correlation Between GAMCO Natural and Virtus AllianzGI
Can any of the company-specific risk be diversified away by investing in both GAMCO Natural and Virtus AllianzGI 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 Virtus AllianzGI 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 Virtus AllianzGI Convertible, you can compare the effects of market volatilities on GAMCO Natural and Virtus AllianzGI 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 Virtus AllianzGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Natural and Virtus AllianzGI.
Diversification Opportunities for GAMCO Natural and Virtus AllianzGI
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GAMCO and Virtus is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Natural Resources and Virtus AllianzGI Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus AllianzGI Con 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 Virtus AllianzGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus AllianzGI Con has no effect on the direction of GAMCO Natural i.e., GAMCO Natural and Virtus AllianzGI go up and down completely randomly.
Pair Corralation between GAMCO Natural and Virtus AllianzGI
Assuming the 90 days trading horizon GAMCO Natural is expected to generate 1.27 times less return on investment than Virtus AllianzGI. But when comparing it to its historical volatility, GAMCO Natural Resources is 1.2 times less risky than Virtus AllianzGI. It trades about 0.05 of its potential returns per unit of risk. Virtus AllianzGI Convertible is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,018 in Virtus AllianzGI Convertible on September 4, 2024 and sell it today you would earn a total of 191.00 from holding Virtus AllianzGI Convertible or generate 9.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
GAMCO Natural Resources vs. Virtus AllianzGI Convertible
Performance |
Timeline |
GAMCO Natural Resources |
Virtus AllianzGI Con |
GAMCO Natural and Virtus AllianzGI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GAMCO Natural and Virtus AllianzGI
The main advantage of trading using opposite GAMCO Natural and Virtus AllianzGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Natural position performs unexpectedly, Virtus AllianzGI 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 Virtus AllianzGI will offset losses from the drop in Virtus AllianzGI'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 |
Virtus AllianzGI vs. The Gabelli Equity | Virtus AllianzGI vs. The Gabelli Multimedia | Virtus AllianzGI vs. GAMCO Natural Resources | Virtus AllianzGI vs. The Gabelli Dividend |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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