Correlation Between Gamco Global and Leggmason Partners
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Leggmason Partners 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 Leggmason Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Global Opportunity and Leggmason Partners Institutional, you can compare the effects of market volatilities on Gamco Global and Leggmason Partners 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 Leggmason Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Leggmason Partners.
Diversification Opportunities for Gamco Global and Leggmason Partners
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gamco and Leggmason is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Opportunity and Leggmason Partners Institution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leggmason Partners 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 Opportunity are associated (or correlated) with Leggmason Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leggmason Partners has no effect on the direction of Gamco Global i.e., Gamco Global and Leggmason Partners go up and down completely randomly.
Pair Corralation between Gamco Global and Leggmason Partners
Assuming the 90 days horizon Gamco Global Opportunity is expected to generate 1.1 times more return on investment than Leggmason Partners. However, Gamco Global is 1.1 times more volatile than Leggmason Partners Institutional. It trades about 0.02 of its potential returns per unit of risk. Leggmason Partners Institutional is currently generating about 0.02 per unit of risk. If you would invest 1,133 in Gamco Global Opportunity on September 12, 2024 and sell it today you would earn a total of 62.00 from holding Gamco Global Opportunity or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Gamco Global Opportunity vs. Leggmason Partners Institution
Performance |
| Timeline |
| Gamco Global Opportunity |
| Leggmason Partners |
Gamco Global and Leggmason Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Leggmason Partners
The main advantage of trading using opposite Gamco Global and Leggmason Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Leggmason Partners 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 Leggmason Partners will offset losses from the drop in Leggmason Partners' long position.| Gamco Global vs. Mesirow Financial Small | Gamco Global vs. Royce Global Financial | Gamco Global vs. Davis Financial Fund | Gamco Global vs. Icon Financial Fund |
| Leggmason Partners vs. Siit Ultra Short | Leggmason Partners vs. Blackrock Short Term Inflat Protected | Leggmason Partners vs. Dreyfus Short Intermediate | Leggmason Partners vs. Astor Longshort Fund |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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