Correlation Between GAMCO Natural and Western Asset
Can any of the company-specific risk be diversified away by investing in both GAMCO Natural and Western Asset 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 Western Asset 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 Western Asset Mortgage, you can compare the effects of market volatilities on GAMCO Natural and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Natural and Western Asset.
Diversification Opportunities for GAMCO Natural and Western Asset
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GAMCO and Western is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Natural Resources and Western Asset Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Mortgage 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Mortgage has no effect on the direction of GAMCO Natural i.e., GAMCO Natural and Western Asset go up and down completely randomly.
Pair Corralation between GAMCO Natural and Western Asset
Considering the 90-day investment horizon GAMCO Natural is expected to generate 2.29 times less return on investment than Western Asset. In addition to that, GAMCO Natural is 2.12 times more volatile than Western Asset Mortgage. It trades about 0.02 of its total potential returns per unit of risk. Western Asset Mortgage is currently generating about 0.08 per unit of volatility. If you would invest 1,172 in Western Asset Mortgage on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Western Asset Mortgage or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMCO Natural Resources vs. Western Asset Mortgage
Performance |
| Timeline |
| GAMCO Natural Resources |
| Western Asset Mortgage |
GAMCO Natural and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMCO Natural and Western Asset
The main advantage of trading using opposite GAMCO Natural and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Natural position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| GAMCO Natural vs. MFS Investment Grade | GAMCO Natural vs. Invesco High Income | GAMCO Natural vs. Eaton Vance National | GAMCO Natural vs. Federated Premier Municipal |
| Western Asset vs. Gabelli Global Small | Western Asset vs. MFS Investment Grade | Western Asset vs. Eaton Vance National | Western Asset vs. GAMCO Natural Resources |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |