Correlation Between Rocky Brands and GAMCO Global
Can any of the company-specific risk be diversified away by investing in both Rocky Brands 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 Rocky Brands and GAMCO Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Brands and GAMCO Global Gold, you can compare the effects of market volatilities on Rocky Brands 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 Rocky Brands with a short position of GAMCO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Brands and GAMCO Global.
Diversification Opportunities for Rocky Brands and GAMCO Global
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Rocky and GAMCO is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands 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 Rocky Brands 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 Rocky Brands 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 Rocky Brands i.e., Rocky Brands and GAMCO Global go up and down completely randomly.
Pair Corralation between Rocky Brands and GAMCO Global
Given the investment horizon of 90 days Rocky Brands is expected to under-perform the GAMCO Global. In addition to that, Rocky Brands is 5.52 times more volatile than GAMCO Global Gold. It trades about -0.01 of its total potential returns per unit of risk. GAMCO Global Gold is currently generating about 0.04 per unit of volatility. If you would invest 2,047 in GAMCO Global Gold on September 3, 2024 and sell it today you would earn a total of 135.00 from holding GAMCO Global Gold or generate 6.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.93% |
| Values | Daily Returns |
Rocky Brands vs. GAMCO Global Gold
Performance |
| Timeline |
| Rocky Brands |
| GAMCO Global Gold |
Rocky Brands and GAMCO Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Brands and GAMCO Global
The main advantage of trading using opposite Rocky Brands and GAMCO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Brands 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.| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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