Correlation Between Abrdn Emerging and Gamco Global

Can any of the company-specific risk be diversified away by investing in both Abrdn Emerging and Gamco 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 Abrdn Emerging and Gamco Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abrdn Emerging Markets and Gamco Global, you can compare the effects of market volatilities on Abrdn Emerging and Gamco 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 Abrdn Emerging with a short position of Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Emerging and Gamco Global.

Diversification Opportunities for Abrdn Emerging and Gamco Global

0.71

Correlation Coefficient

Abrdn Emerging  Gamco Global

Poor diversification

The 3 months correlation between Abrdn and Gamco is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Emerging Markets and Gamco Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global and Abrdn Emerging 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 Abrdn Emerging Markets are associated (or correlated) with Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global has no effect on the direction of Abrdn Emerging i.e., Abrdn Emerging and Gamco Global go up and down completely randomly.

Pair Corralation between Abrdn Emerging and Gamco Global

Considering the 90-day investment horizon Abrdn Emerging is expected to generate 1.33 times less return on investment than Gamco Global. In addition to that, Abrdn Emerging is 1.37 times more volatile than Gamco Global. It trades about 0.03 of its total potential returns per unit of risk. Gamco Global is currently generating about 0.05 per unit of volatility. If you would invest  401.00  in Gamco Global on September 4, 2024 and sell it today you would earn a total of  10.00  from holding Gamco Global or generate 2.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Abrdn Emerging Markets  vs.  Gamco Global

Abrdn Emerging Markets

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Abrdn Emerging Markets are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Abrdn Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Gamco Global

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy technical and fundamental indicators, Gamco Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Abrdn Emerging and Gamco Global

The main advantage of trading using opposite Abrdn Emerging and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Emerging position performs unexpectedly, Gamco 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 Gamco Global will offset losses from the drop in Gamco Global's long position.

The idea behind Abrdn Emerging Markets and Gamco Global pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.