Correlation Between Virtus AllianzGI and GAMCO Natural
Can any of the company-specific risk be diversified away by investing in both Virtus AllianzGI and GAMCO Natural 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 Virtus AllianzGI and GAMCO Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Virtus AllianzGI Convertible and GAMCO Natural Resources, you can compare the effects of market volatilities on Virtus AllianzGI and GAMCO Natural 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 Virtus AllianzGI with a short position of GAMCO Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Virtus AllianzGI and GAMCO Natural.
Diversification Opportunities for Virtus AllianzGI and GAMCO Natural
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Virtus and GAMCO is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Virtus AllianzGI Convertible and GAMCO Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Natural Resources and Virtus AllianzGI 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 Virtus AllianzGI Convertible are associated (or correlated) with GAMCO Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMCO Natural Resources has no effect on the direction of Virtus AllianzGI i.e., Virtus AllianzGI and GAMCO Natural go up and down completely randomly.
Pair Corralation between Virtus AllianzGI and GAMCO Natural
Assuming the 90 days trading horizon Virtus AllianzGI Convertible is expected to generate about the same return on investment as GAMCO Natural Resources. However, Virtus AllianzGI is 1.28 times more volatile than GAMCO Natural Resources. It trades about 0.04 of its potential returns per unit of risk. GAMCO Natural Resources is currently producing about 0.05 per unit of risk. If you would invest 2,169 in GAMCO Natural Resources on August 25, 2024 and sell it today you would earn a total of 108.00 from holding GAMCO Natural Resources or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Virtus AllianzGI Convertible vs. GAMCO Natural Resources
Performance |
| Timeline |
| Virtus AllianzGI Con |
| GAMCO Natural Resources |
Virtus AllianzGI and GAMCO Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Virtus AllianzGI and GAMCO Natural
The main advantage of trading using opposite Virtus AllianzGI and GAMCO Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virtus AllianzGI position performs unexpectedly, GAMCO Natural 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 Natural will offset losses from the drop in GAMCO Natural's long position.| Virtus AllianzGI vs. The Gabelli Equity | Virtus AllianzGI vs. The Gabelli Equity | Virtus AllianzGI vs. Oxford Lane Capital | Virtus AllianzGI vs. The Gabelli Utility |
| GAMCO Natural vs. The Gabelli Multimedia | GAMCO Natural vs. The Gabelli Equity | GAMCO Natural vs. Virtus AllianzGI Convertible | GAMCO Natural vs. John Hancock Income |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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