Correlation Between Gamco Natural and The Gold
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and The Gold 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 The Gold 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 The Gold Bullion, you can compare the effects of market volatilities on Gamco Natural and The Gold 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 The Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and The Gold.
Diversification Opportunities for Gamco Natural and The Gold
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GAMCO and The is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion 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 The Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion has no effect on the direction of Gamco Natural i.e., Gamco Natural and The Gold go up and down completely randomly.
Pair Corralation between Gamco Natural and The Gold
Assuming the 90 days horizon Gamco Natural Resources is expected to generate 0.58 times more return on investment than The Gold. However, Gamco Natural Resources is 1.73 times less risky than The Gold. It trades about -0.12 of its potential returns per unit of risk. The Gold Bullion is currently generating about -0.15 per unit of risk. If you would invest 662.00 in Gamco Natural Resources on August 28, 2024 and sell it today you would lose (13.00) from holding Gamco Natural Resources or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gamco Natural Resources vs. The Gold Bullion
Performance |
| Timeline |
| Gamco Natural Resources |
| Gold Bullion |
Gamco Natural and The Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and The Gold
The main advantage of trading using opposite Gamco Natural and The Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, The Gold 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 The Gold will offset losses from the drop in The Gold's long position.| Gamco Natural vs. Teton Vertible Securities | Gamco Natural vs. Mainstay Vertible Fund | Gamco Natural vs. Fidelity Vertible Securities | Gamco Natural vs. Lord Abbett Vertible |
| The Gold vs. Aquagold International | The Gold vs. Morningstar Unconstrained Allocation | The Gold vs. Thrivent High Yield | The Gold vs. Via Renewables |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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