Correlation Between Federated Ohio and Gamco International
Can any of the company-specific risk be diversified away by investing in both Federated Ohio and Gamco International 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 Federated Ohio and Gamco International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ohio Municipal and Gamco International Growth, you can compare the effects of market volatilities on Federated Ohio and Gamco International 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 Federated Ohio with a short position of Gamco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Gamco International.
Diversification Opportunities for Federated Ohio and Gamco International
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Gamco is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Gamco International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco International and Federated Ohio 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 Federated Ohio Municipal are associated (or correlated) with Gamco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco International has no effect on the direction of Federated Ohio i.e., Federated Ohio and Gamco International go up and down completely randomly.
Pair Corralation between Federated Ohio and Gamco International
Assuming the 90 days horizon Federated Ohio Municipal is expected to generate 0.25 times more return on investment than Gamco International. However, Federated Ohio Municipal is 4.08 times less risky than Gamco International. It trades about 0.06 of its potential returns per unit of risk. Gamco International Growth is currently generating about 0.01 per unit of risk. If you would invest 980.00 in Federated Ohio Municipal on September 3, 2024 and sell it today you would earn a total of 70.00 from holding Federated Ohio Municipal or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Gamco International Growth
Performance |
| Timeline |
| Federated Ohio Municipal |
| Gamco International |
Federated Ohio and Gamco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Gamco International
The main advantage of trading using opposite Federated Ohio and Gamco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio position performs unexpectedly, Gamco International 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 International will offset losses from the drop in Gamco International's long position.| Federated Ohio vs. Gmo Resources | Federated Ohio vs. Fidelity Advisor Energy | Federated Ohio vs. Calvert Global Energy | Federated Ohio vs. Energy Basic Materials |
| Gamco International vs. Mutual Of America | Gamco International vs. Ultramid Cap Profund Ultramid Cap | Gamco International vs. Columbia Small Cap | Gamco International vs. Boston Partners Small |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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