Correlation Between Summit Global and Gamco Natural
Can any of the company-specific risk be diversified away by investing in both Summit Global 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 Summit Global and Gamco Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Global Investments and Gamco Natural Resources, you can compare the effects of market volatilities on Summit Global 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 Summit Global with a short position of Gamco Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Global and Gamco Natural.
Diversification Opportunities for Summit Global and Gamco Natural
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Summit and Gamco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Summit Global Investments 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 Summit Global 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 Summit Global Investments 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 Summit Global i.e., Summit Global and Gamco Natural go up and down completely randomly.
Pair Corralation between Summit Global and Gamco Natural
Assuming the 90 days horizon Summit Global Investments is expected to generate 0.83 times more return on investment than Gamco Natural. However, Summit Global Investments is 1.2 times less risky than Gamco Natural. It trades about 0.07 of its potential returns per unit of risk. Gamco Natural Resources is currently generating about 0.02 per unit of risk. If you would invest 1,719 in Summit Global Investments on September 4, 2024 and sell it today you would earn a total of 430.00 from holding Summit Global Investments or generate 25.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Global Investments vs. Gamco Natural Resources
Performance |
| Timeline |
| Summit Global Investments |
| Gamco Natural Resources |
Summit Global and Gamco Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Global and Gamco Natural
The main advantage of trading using opposite Summit Global and Gamco Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Global 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.| Summit Global vs. Gamco Natural Resources | Summit Global vs. Calvert Global Energy | Summit Global vs. World Energy Fund | Summit Global vs. Adams Natural Resources |
| Gamco Natural vs. Huber Capital Diversified | Gamco Natural vs. Evaluator Conservative Rms | Gamco Natural vs. Prudential Core Conservative | Gamco Natural vs. Harbor Diversified International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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