Correlation Between Gamco Global and Jensen Quality
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Jensen Quality 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 Jensen Quality 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 Jensen Quality Value, you can compare the effects of market volatilities on Gamco Global and Jensen Quality 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 Jensen Quality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Jensen Quality.
Diversification Opportunities for Gamco Global and Jensen Quality
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and Jensen is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Jensen Quality Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Quality Value 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 Jensen Quality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Quality Value has no effect on the direction of Gamco Global i.e., Gamco Global and Jensen Quality go up and down completely randomly.
Pair Corralation between Gamco Global and Jensen Quality
Assuming the 90 days horizon Gamco Global Gold is expected to generate 0.87 times more return on investment than Jensen Quality. However, Gamco Global Gold is 1.15 times less risky than Jensen Quality. It trades about 0.07 of its potential returns per unit of risk. Jensen Quality Value is currently generating about 0.04 per unit of risk. If you would invest 378.00 in Gamco Global Gold on September 1, 2024 and sell it today you would earn a total of 37.00 from holding Gamco Global Gold or generate 9.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.47% |
| Values | Daily Returns |
Gamco Global Gold vs. Jensen Quality Value
Performance |
| Timeline |
| Gamco Global Gold |
| Jensen Quality Value |
Gamco Global and Jensen Quality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Jensen Quality
The main advantage of trading using opposite Gamco Global and Jensen Quality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Jensen Quality 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 Jensen Quality will offset losses from the drop in Jensen Quality's long position.| Gamco Global vs. Goldman Sachs Clean | Gamco Global vs. Gabelli Gold Fund | Gamco Global vs. Precious Metals And | Gamco Global vs. James Balanced Golden |
| Jensen Quality vs. The Jensen Portfolio | Jensen Quality vs. The Jensen Portfolio | Jensen Quality vs. The Jensen Portfolio | Jensen Quality vs. The Jensen Portfolio |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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