Correlation Between Gamco Global and Salient Alternative
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Salient Alternative 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 Salient Alternative 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 Salient Alternative Beta, you can compare the effects of market volatilities on Gamco Global and Salient Alternative 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 Salient Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Salient Alternative.
Diversification Opportunities for Gamco Global and Salient Alternative
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and Salient is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Salient Alternative Beta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient Alternative Beta 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 Salient Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient Alternative Beta has no effect on the direction of Gamco Global i.e., Gamco Global and Salient Alternative go up and down completely randomly.
Pair Corralation between Gamco Global and Salient Alternative
Assuming the 90 days horizon Gamco Global Gold is expected to generate 1.18 times more return on investment than Salient Alternative. However, Gamco Global is 1.18 times more volatile than Salient Alternative Beta. It trades about 0.21 of its potential returns per unit of risk. Salient Alternative Beta is currently generating about -0.14 per unit of risk. If you would invest 408.00 in Gamco Global Gold on November 27, 2024 and sell it today you would earn a total of 13.00 from holding Gamco Global Gold or generate 3.19% 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. Salient Alternative Beta
Performance |
| Timeline |
| Gamco Global Gold |
| Salient Alternative Beta |
Gamco Global and Salient Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Salient Alternative
The main advantage of trading using opposite Gamco Global and Salient Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Salient Alternative 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 Salient Alternative will offset losses from the drop in Salient Alternative's long position.| Gamco Global vs. The Gabelli Healthcare | Gamco Global vs. Deutsche Health And | Gamco Global vs. Highland Longshort Healthcare | Gamco Global vs. Tekla Healthcare Investors |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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