Correlation Between Gamco Natural and Aggressive Growth
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Aggressive Growth 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 Aggressive Growth 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 Aggressive Growth Portfolio, you can compare the effects of market volatilities on Gamco Natural and Aggressive Growth 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 Aggressive Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Aggressive Growth.
Diversification Opportunities for Gamco Natural and Aggressive Growth
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gamco and Aggressive is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Aggressive Growth Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 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 Aggressive Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Growth has no effect on the direction of Gamco Natural i.e., Gamco Natural and Aggressive Growth go up and down completely randomly.
Pair Corralation between Gamco Natural and Aggressive Growth
Assuming the 90 days horizon Gamco Natural Resources is expected to under-perform the Aggressive Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Gamco Natural Resources is 1.36 times less risky than Aggressive Growth. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Aggressive Growth Portfolio is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 10,106 in Aggressive Growth Portfolio on September 5, 2024 and sell it today you would earn a total of 1,002 from holding Aggressive Growth Portfolio or generate 9.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gamco Natural Resources vs. Aggressive Growth Portfolio
Performance |
| Timeline |
| Gamco Natural Resources |
| Aggressive Growth |
Gamco Natural and Aggressive Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Aggressive Growth
The main advantage of trading using opposite Gamco Natural and Aggressive Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Aggressive Growth 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 Aggressive Growth will offset losses from the drop in Aggressive Growth's long position.| Gamco Natural vs. Touchstone Large Cap | Gamco Natural vs. Qs Large Cap | Gamco Natural vs. Fidelity Series 1000 | Gamco Natural vs. Dodge Cox Stock |
| Aggressive Growth vs. Calvert Global Energy | Aggressive Growth vs. Invesco Energy Fund | Aggressive Growth vs. Gamco Natural Resources | Aggressive Growth vs. Franklin Natural Resources |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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