Correlation Between Gamco Natural and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Federated Kaufmann 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 Federated Kaufmann 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 Federated Kaufmann Large, you can compare the effects of market volatilities on Gamco Natural and Federated Kaufmann 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 Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Federated Kaufmann.
Diversification Opportunities for Gamco Natural and Federated Kaufmann
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gamco and Federated is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Federated Kaufmann Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Large 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 Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Large has no effect on the direction of Gamco Natural i.e., Gamco Natural and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Gamco Natural and Federated Kaufmann
Assuming the 90 days horizon Gamco Natural is expected to generate 2.94 times less return on investment than Federated Kaufmann. But when comparing it to its historical volatility, Gamco Natural Resources is 1.23 times less risky than Federated Kaufmann. It trades about 0.05 of its potential returns per unit of risk. Federated Kaufmann Large is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,540 in Federated Kaufmann Large on September 4, 2024 and sell it today you would earn a total of 475.00 from holding Federated Kaufmann Large or generate 30.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco Natural Resources vs. Federated Kaufmann Large
Performance |
| Timeline |
| Gamco Natural Resources |
| Federated Kaufmann Large |
Gamco Natural and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Federated Kaufmann
The main advantage of trading using opposite Gamco Natural and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann's long position.| Gamco Natural vs. Huber Capital Diversified | Gamco Natural vs. Evaluator Conservative Rms | Gamco Natural vs. Prudential Core Conservative | Gamco Natural vs. Harbor Diversified International |
| Federated Kaufmann vs. Gamco Natural Resources | Federated Kaufmann vs. Firsthand Alternative Energy | Federated Kaufmann vs. Clearbridge Energy Mlp | Federated Kaufmann vs. Salient Mlp Energy |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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