Correlation Between Gabelli Utility and GAMCO Global
Can any of the company-specific risk be diversified away by investing in both Gabelli Utility and GAMCO Global 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 Gabelli Utility and GAMCO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Utility and GAMCO Global Gold, you can compare the effects of market volatilities on Gabelli Utility and GAMCO Global 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 Gabelli Utility with a short position of GAMCO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utility and GAMCO Global.
Diversification Opportunities for Gabelli Utility and GAMCO Global
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gabelli and GAMCO is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Utility and GAMCO Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Global Gold and Gabelli Utility 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 The Gabelli Utility are associated (or correlated) with GAMCO Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMCO Global Gold has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and GAMCO Global go up and down completely randomly.
Pair Corralation between Gabelli Utility and GAMCO Global
Assuming the 90 days trading horizon The Gabelli Utility is expected to generate 1.66 times more return on investment than GAMCO Global. However, Gabelli Utility is 1.66 times more volatile than GAMCO Global Gold. It trades about 0.0 of its potential returns per unit of risk. GAMCO Global Gold is currently generating about -0.15 per unit of risk. If you would invest 2,467 in The Gabelli Utility on August 28, 2024 and sell it today you would lose (4.00) from holding The Gabelli Utility or give up 0.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Utility vs. GAMCO Global Gold
Performance |
| Timeline |
| Gabelli Utility |
| GAMCO Global Gold |
Gabelli Utility and GAMCO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Utility and GAMCO Global
The main advantage of trading using opposite Gabelli Utility and GAMCO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Utility position performs unexpectedly, GAMCO Global 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 GAMCO Global will offset losses from the drop in GAMCO Global's long position.| Gabelli Utility vs. The Gabelli Multimedia | Gabelli Utility vs. The Gabelli Multimedia | Gabelli Utility vs. The Gabelli Dividend | Gabelli Utility vs. The Gabelli Equity |
| GAMCO Global vs. Oxford Lane Capital | GAMCO Global vs. XOMA Corporation | GAMCO Global vs. HUMANA INC | GAMCO Global vs. Aquagold International |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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