Correlation Between Gamco Global and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Emerging Markets 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 Gamco Global and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Global Gold and The Emerging Markets, you can compare the effects of market volatilities on Gamco Global and Emerging Markets 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 Gamco Global with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Emerging Markets.
Diversification Opportunities for Gamco Global and Emerging Markets
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and Emerging is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and The Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets and Gamco 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 Gamco Global Gold are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Gamco Global i.e., Gamco Global and Emerging Markets go up and down completely randomly.
Pair Corralation between Gamco Global and Emerging Markets
Assuming the 90 days horizon Gamco Global Gold is expected to generate 0.64 times more return on investment than Emerging Markets. However, Gamco Global Gold is 1.57 times less risky than Emerging Markets. It trades about 0.32 of its potential returns per unit of risk. The Emerging Markets is currently generating about 0.09 per unit of risk. If you would invest 394.00 in Gamco Global Gold on November 4, 2024 and sell it today you would earn a total of 17.00 from holding Gamco Global Gold or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco Global Gold vs. The Emerging Markets
Performance |
| Timeline |
| Gamco Global Gold |
| Emerging Markets |
Gamco Global and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Emerging Markets
The main advantage of trading using opposite Gamco Global and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Gamco Global vs. Morningstar Municipal Bond | Gamco Global vs. Old Westbury California | Gamco Global vs. Blrc Sgy Mnp | Gamco Global vs. Gamco Global Telecommunications |
| Emerging Markets vs. Federated Emerging Market | Emerging Markets vs. Dodge Cox Emerging | Emerging Markets vs. Mid Cap 15x Strategy | Emerging Markets vs. Siit Emerging Markets |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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