Correlation Between Gamco Natural and Guinness Atkinson
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Guinness Atkinson 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 Natural and Guinness Atkinson into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Natural Resources and Guinness Atkinson Alternative, you can compare the effects of market volatilities on Gamco Natural and Guinness Atkinson 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 Natural with a short position of Guinness Atkinson. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Guinness Atkinson.
Diversification Opportunities for Gamco Natural and Guinness Atkinson
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamco and Guinness is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Guinness Atkinson Alternative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guinness Atkinson and Gamco Natural 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 Natural Resources are associated (or correlated) with Guinness Atkinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guinness Atkinson has no effect on the direction of Gamco Natural i.e., Gamco Natural and Guinness Atkinson go up and down completely randomly.
Pair Corralation between Gamco Natural and Guinness Atkinson
Assuming the 90 days horizon Gamco Natural Resources is expected to under-perform the Guinness Atkinson. But the mutual fund apears to be less risky and, when comparing its historical volatility, Gamco Natural Resources is 1.42 times less risky than Guinness Atkinson. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Guinness Atkinson Alternative is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 559.00 in Guinness Atkinson Alternative on September 1, 2024 and sell it today you would lose (8.00) from holding Guinness Atkinson Alternative or give up 1.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco Natural Resources vs. Guinness Atkinson Alternative
Performance |
| Timeline |
| Gamco Natural Resources |
| Guinness Atkinson |
Gamco Natural and Guinness Atkinson Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Guinness Atkinson
The main advantage of trading using opposite Gamco Natural and Guinness Atkinson positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Guinness Atkinson 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 Guinness Atkinson will offset losses from the drop in Guinness Atkinson's long position.| Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard 500 Index | Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard Total Stock |
| Guinness Atkinson vs. New Alternatives Fund | Guinness Atkinson vs. Calvert Global Energy | Guinness Atkinson vs. Firsthand Alternative Energy | Guinness Atkinson vs. Guinness Atkinson Global |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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