Correlation Between Adams Natural and Gamco Global
Can any of the company-specific risk be diversified away by investing in both Adams Natural 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 Adams Natural and Gamco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Gamco Global Gold, you can compare the effects of market volatilities on Adams Natural 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 Adams Natural with a short position of Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Gamco Global.
Diversification Opportunities for Adams Natural and Gamco Global
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adams and Gamco is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources 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 Adams Natural 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 Adams Natural Resources 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 Adams Natural i.e., Adams Natural and Gamco Global go up and down completely randomly.
Pair Corralation between Adams Natural and Gamco Global
Considering the 90-day investment horizon Adams Natural Resources is expected to generate 0.77 times more return on investment than Gamco Global. However, Adams Natural Resources is 1.3 times less risky than Gamco Global. It trades about -0.09 of its potential returns per unit of risk. Gamco Global Gold is currently generating about -0.24 per unit of risk. If you would invest 2,275 in Adams Natural Resources on October 10, 2024 and sell it today you would lose (37.00) from holding Adams Natural Resources or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Natural Resources vs. Gamco Global Gold
Performance |
| Timeline |
| Adams Natural Resources |
| Gamco Global Gold |
Adams Natural and Gamco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and Gamco Global
The main advantage of trading using opposite Adams Natural and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural 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.| Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
| Gamco Global vs. Fidelity Advisor Energy | Gamco Global vs. Clearbridge Energy Mlp | Gamco Global vs. Hennessy Bp Energy | Gamco Global vs. Icon Natural Resources |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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