Correlation Between Gamco Global and Pear Tree
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Pear Tree 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 Pear Tree 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 Pear Tree Polaris, you can compare the effects of market volatilities on Gamco Global and Pear Tree 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 Pear Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Pear Tree.
Diversification Opportunities for Gamco Global and Pear Tree
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and Pear is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Pear Tree Polaris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pear Tree Polaris 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 Pear Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pear Tree Polaris has no effect on the direction of Gamco Global i.e., Gamco Global and Pear Tree go up and down completely randomly.
Pair Corralation between Gamco Global and Pear Tree
Assuming the 90 days horizon Gamco Global Gold is expected to generate 1.7 times more return on investment than Pear Tree. However, Gamco Global is 1.7 times more volatile than Pear Tree Polaris. It trades about 0.13 of its potential returns per unit of risk. Pear Tree Polaris is currently generating about 0.05 per unit of risk. If you would invest 410.00 in Gamco Global Gold on September 13, 2024 and sell it today you would earn a total of 9.00 from holding Gamco Global Gold or generate 2.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gamco Global Gold vs. Pear Tree Polaris
Performance |
| Timeline |
| Gamco Global Gold |
| Pear Tree Polaris |
Gamco Global and Pear Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Pear Tree
The main advantage of trading using opposite Gamco Global and Pear Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Pear Tree 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 Pear Tree will offset losses from the drop in Pear Tree's long position.| Gamco Global vs. Ab Global Bond | Gamco Global vs. Morningstar Global Income | Gamco Global vs. Mirova Global Green | Gamco Global vs. Jhancock Global Equity |
| Pear Tree vs. Essex Environmental Opportunities | Pear Tree vs. Pear Tree Quality | Pear Tree vs. Pear Tree Polaris | Pear Tree vs. Pear Tree Polaris |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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