Correlation Between Gamco Natural and Mfs Aggressive
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Mfs Aggressive 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 Mfs Aggressive 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 Mfs Aggressive Growth, you can compare the effects of market volatilities on Gamco Natural and Mfs Aggressive 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 Mfs Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Mfs Aggressive.
Diversification Opportunities for Gamco Natural and Mfs Aggressive
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gamco and Mfs is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Mfs Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Aggressive Growth 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 Mfs Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Aggressive Growth has no effect on the direction of Gamco Natural i.e., Gamco Natural and Mfs Aggressive go up and down completely randomly.
Pair Corralation between Gamco Natural and Mfs Aggressive
Assuming the 90 days horizon Gamco Natural Resources is expected to generate 1.62 times more return on investment than Mfs Aggressive. However, Gamco Natural is 1.62 times more volatile than Mfs Aggressive Growth. It trades about 0.13 of its potential returns per unit of risk. Mfs Aggressive Growth is currently generating about 0.11 per unit of risk. If you would invest 632.00 in Gamco Natural Resources on September 13, 2024 and sell it today you would earn a total of 12.00 from holding Gamco Natural Resources or generate 1.9% 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. Mfs Aggressive Growth
Performance |
| Timeline |
| Gamco Natural Resources |
| Mfs Aggressive Growth |
Gamco Natural and Mfs Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Mfs Aggressive
The main advantage of trading using opposite Gamco Natural and Mfs Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Mfs Aggressive 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 Mfs Aggressive will offset losses from the drop in Mfs Aggressive'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 |
| Mfs Aggressive vs. Alliancebernstein Bond | Mfs Aggressive vs. Franklin High Yield | Mfs Aggressive vs. Touchstone Premium Yield | Mfs Aggressive vs. T Rowe Price |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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