Correlation Between Gamco Natural and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Scharf 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 Scharf 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 Scharf Global Opportunity, you can compare the effects of market volatilities on Gamco Natural and Scharf 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 Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Scharf Global.
Diversification Opportunities for Gamco Natural and Scharf Global
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gamco and Scharf is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity 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 Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Gamco Natural i.e., Gamco Natural and Scharf Global go up and down completely randomly.
Pair Corralation between Gamco Natural and Scharf Global
Assuming the 90 days horizon Gamco Natural Resources is expected to generate 1.64 times more return on investment than Scharf Global. However, Gamco Natural is 1.64 times more volatile than Scharf Global Opportunity. It trades about 0.17 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about -0.01 per unit of risk. If you would invest 624.00 in Gamco Natural Resources on September 15, 2024 and sell it today you would earn a total of 17.00 from holding Gamco Natural Resources or generate 2.72% 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. Scharf Global Opportunity
Performance |
| Timeline |
| Gamco Natural Resources |
| Scharf Global Opportunity |
Gamco Natural and Scharf Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamco Natural and Scharf Global
The main advantage of trading using opposite Gamco Natural and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural position performs unexpectedly, Scharf 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 Scharf Global will offset losses from the drop in Scharf Global's long position.| Gamco Natural vs. Blackrock Sm Cap | Gamco Natural vs. Huber Capital Diversified | Gamco Natural vs. Wasatch Small Cap | Gamco Natural vs. Fidelity Advisor Diversified |
| Scharf Global vs. Dreyfus Natural Resources | Scharf Global vs. Adams Natural Resources | Scharf Global vs. Gamco Natural Resources | Scharf Global vs. Firsthand Alternative Energy |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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