Correlation Between Gamco Global and Sextant Core
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Sextant Core 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 Sextant Core 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 Sextant E Fund, you can compare the effects of market volatilities on Gamco Global and Sextant Core 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 Sextant Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Sextant Core.
Diversification Opportunities for Gamco Global and Sextant Core
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and Sextant is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Sextant E Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant E Fund 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 Sextant Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant E Fund has no effect on the direction of Gamco Global i.e., Gamco Global and Sextant Core go up and down completely randomly.
Pair Corralation between Gamco Global and Sextant Core
Assuming the 90 days horizon Gamco Global is expected to generate 3.97 times less return on investment than Sextant Core. In addition to that, Gamco Global is 1.88 times more volatile than Sextant E Fund. It trades about 0.01 of its total potential returns per unit of risk. Sextant E Fund is currently generating about 0.08 per unit of volatility. If you would invest 1,421 in Sextant E Fund on November 5, 2024 and sell it today you would earn a total of 275.00 from holding Sextant E Fund or generate 19.35% 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. Sextant E Fund
Performance |
| Timeline |
| Gamco Global Gold |
| Sextant E Fund |
Gamco Global and Sextant Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Global and Sextant Core
The main advantage of trading using opposite Gamco Global and Sextant Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Sextant Core 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 Sextant Core will offset losses from the drop in Sextant Core's long position.| Gamco Global vs. Lifestyle Ii Moderate | Gamco Global vs. Putnam Retirement Advantage | Gamco Global vs. Wilmington Trust Retirement | Gamco Global vs. Columbia Moderate Growth |
| Sextant Core vs. Fidelity Advisor Technology | Sextant Core vs. Technology Ultrasector Profund | Sextant Core vs. Pgim Jennison Technology | Sextant Core vs. Red Oak Technology |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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