Correlation Between Gamco Global and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Old Westbury 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 Old Westbury 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 Old Westbury Municipal, you can compare the effects of market volatilities on Gamco Global and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Old Westbury.
Diversification Opportunities for Gamco Global and Old Westbury
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gamco and Old is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Gamco Global i.e., Gamco Global and Old Westbury go up and down completely randomly.
Pair Corralation between Gamco Global and Old Westbury
Assuming the 90 days horizon Gamco Global Gold is expected to generate 4.78 times more return on investment than Old Westbury. However, Gamco Global is 4.78 times more volatile than Old Westbury Municipal. It trades about 0.01 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.03 per unit of risk. If you would invest 411.00 in Gamco Global Gold on October 25, 2024 and sell it today you would earn a total of 1.00 from holding Gamco Global Gold or generate 0.24% 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. Old Westbury Municipal
Performance |
| Timeline |
| Gamco Global Gold |
| Old Westbury Municipal |
Gamco Global and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Old Westbury
The main advantage of trading using opposite Gamco Global and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Gamco Global vs. Tekla Healthcare Investors | Gamco Global vs. Blackrock Health Sciences | Gamco Global vs. Baron Health Care | Gamco Global vs. Allianzgi Health Sciences |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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