Correlation Between Gamco Natural and American Beacon
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and American Beacon 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 American Beacon 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 American Beacon Twentyfour, you can compare the effects of market volatilities on Gamco Natural and American Beacon 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 American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and American Beacon.
Diversification Opportunities for Gamco Natural and American Beacon
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gamco and American is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and American Beacon Twentyfour in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Twen 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 American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Twen has no effect on the direction of Gamco Natural i.e., Gamco Natural and American Beacon go up and down completely randomly.
Pair Corralation between Gamco Natural and American Beacon
Assuming the 90 days horizon Gamco Natural is expected to generate 2.03 times less return on investment than American Beacon. In addition to that, Gamco Natural is 8.33 times more volatile than American Beacon Twentyfour. It trades about 0.02 of its total potential returns per unit of risk. American Beacon Twentyfour is currently generating about 0.29 per unit of volatility. If you would invest 848.00 in American Beacon Twentyfour on September 1, 2024 and sell it today you would earn a total of 28.00 from holding American Beacon Twentyfour or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Gamco Natural Resources vs. American Beacon Twentyfour
Performance |
| Timeline |
| Gamco Natural Resources |
| American Beacon Twen |
Gamco Natural and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and American Beacon
The main advantage of trading using opposite Gamco Natural and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon'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 |
| American Beacon vs. Goldman Sachs Real | American Beacon vs. Deutsche Real Estate | American Beacon vs. Prudential Real Estate | American Beacon vs. Jhancock Real Estate |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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