Correlation Between Gamco Global and Meridian Equity
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Meridian Equity 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 Meridian Equity 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 Meridian Equity Income, you can compare the effects of market volatilities on Gamco Global and Meridian Equity 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 Meridian Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Meridian Equity.
Diversification Opportunities for Gamco Global and Meridian Equity
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gamco and Meridian is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Meridian Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meridian Equity Income 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 Meridian Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meridian Equity Income has no effect on the direction of Gamco Global i.e., Gamco Global and Meridian Equity go up and down completely randomly.
Pair Corralation between Gamco Global and Meridian Equity
Assuming the 90 days horizon Gamco Global is expected to generate 3.31 times less return on investment than Meridian Equity. In addition to that, Gamco Global is 1.4 times more volatile than Meridian Equity Income. It trades about 0.02 of its total potential returns per unit of risk. Meridian Equity Income is currently generating about 0.09 per unit of volatility. If you would invest 1,185 in Meridian Equity Income on September 12, 2024 and sell it today you would earn a total of 224.00 from holding Meridian Equity Income or generate 18.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco Global Gold vs. Meridian Equity Income
Performance |
| Timeline |
| Gamco Global Gold |
| Meridian Equity Income |
Gamco Global and Meridian Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Meridian Equity
The main advantage of trading using opposite Gamco Global and Meridian Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Meridian Equity 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 Meridian Equity will offset losses from the drop in Meridian Equity's long position.| Gamco Global vs. Rbb Fund | Gamco Global vs. Commonwealth Global Fund | Gamco Global vs. Auer Growth Fund | Gamco Global vs. Small Cap Stock |
| Meridian Equity vs. Gold And Precious | Meridian Equity vs. Gamco Global Gold | Meridian Equity vs. Oppenheimer Gold Special | Meridian Equity vs. International Investors Gold |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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