Correlation Between Gamco Natural and Summit Global
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Summit Global 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 Summit Global 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 Summit Global Investments, you can compare the effects of market volatilities on Gamco Natural and Summit Global 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 Summit Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Summit Global.
Diversification Opportunities for Gamco Natural and Summit Global
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamco and Summit is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Summit Global Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Global Investments 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 Summit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Global Investments has no effect on the direction of Gamco Natural i.e., Gamco Natural and Summit Global go up and down completely randomly.
Pair Corralation between Gamco Natural and Summit Global
Assuming the 90 days horizon Gamco Natural is expected to generate 2.39 times less return on investment than Summit Global. In addition to that, Gamco Natural is 1.21 times more volatile than Summit Global Investments. It trades about 0.03 of its total potential returns per unit of risk. Summit Global Investments is currently generating about 0.07 per unit of volatility. If you would invest 1,670 in Summit Global Investments on September 12, 2024 and sell it today you would earn a total of 459.00 from holding Summit Global Investments or generate 27.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gamco Natural Resources vs. Summit Global Investments
Performance |
| Timeline |
| Gamco Natural Resources |
| Summit Global Investments |
Gamco Natural and Summit Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Summit Global
The main advantage of trading using opposite Gamco Natural and Summit Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Summit Global 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 Summit Global will offset losses from the drop in Summit Global's long position.| Gamco Natural vs. Avantis Large Cap | Gamco Natural vs. American Mutual Fund | Gamco Natural vs. Jhancock Disciplined Value | Gamco Natural vs. Pace Large Value |
| Summit Global vs. Firsthand Alternative Energy | Summit Global vs. Icon Natural Resources | Summit Global vs. Goehring Rozencwajg Resources | Summit Global vs. Energy Basic Materials |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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