Correlation Between NXG NextGen and GAMCO Natural
Can any of the company-specific risk be diversified away by investing in both NXG NextGen 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 NXG NextGen and GAMCO Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXG NextGen Infrastructure and GAMCO Natural Resources, you can compare the effects of market volatilities on NXG NextGen 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 NXG NextGen with a short position of GAMCO Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXG NextGen and GAMCO Natural.
Diversification Opportunities for NXG NextGen and GAMCO Natural
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between NXG and GAMCO is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NXG NextGen Infrastructure 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 NXG NextGen 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 NXG NextGen Infrastructure 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 NXG NextGen i.e., NXG NextGen and GAMCO Natural go up and down completely randomly.
Pair Corralation between NXG NextGen and GAMCO Natural
Considering the 90-day investment horizon NXG NextGen Infrastructure is expected to generate 1.09 times more return on investment than GAMCO Natural. However, NXG NextGen is 1.09 times more volatile than GAMCO Natural Resources. It trades about 0.75 of its potential returns per unit of risk. GAMCO Natural Resources is currently generating about 0.0 per unit of risk. If you would invest 4,270 in NXG NextGen Infrastructure on August 30, 2024 and sell it today you would earn a total of 870.00 from holding NXG NextGen Infrastructure or generate 20.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NXG NextGen Infrastructure vs. GAMCO Natural Resources
Performance |
| Timeline |
| NXG NextGen Infrastr |
| GAMCO Natural Resources |
NXG NextGen and GAMCO Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NXG NextGen and GAMCO Natural
The main advantage of trading using opposite NXG NextGen and GAMCO Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXG NextGen 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.| NXG NextGen vs. MFS Investment Grade | NXG NextGen vs. Invesco High Income | NXG NextGen vs. Eaton Vance National | NXG NextGen vs. Nuveen California Select |
| GAMCO Natural vs. MFS Investment Grade | GAMCO Natural vs. Invesco High Income | GAMCO Natural vs. Eaton Vance National | GAMCO Natural vs. Federated Premier Municipal |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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