Correlation Between Auer Growth and Gamco Global

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

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

Diversification Opportunities for Auer Growth and Gamco Global

0.3

Correlation Coefficient

Auer Growth  Gamco Global

Weak diversification

The 3 months correlation between Auer and Gamco is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Gamco Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Opportunity and Auer Growth 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 Auer Growth Fund 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 Opportunity has no effect on the direction of Auer Growth i.e., Auer Growth and Gamco Global go up and down completely randomly.

Pair Corralation between Auer Growth and Gamco Global

Assuming the 90 days horizon Auer Growth Fund is expected to under-perform the Gamco Global. In addition to that, Auer Growth is 1.07 times more volatile than Gamco Global Opportunity. It trades about -0.11 of its total potential returns per unit of risk. Gamco Global Opportunity is currently generating about 0.14 per unit of volatility. If you would invest  1,137  in Gamco Global Opportunity on December 2, 2024 and sell it today you would earn a total of  54.00  from holding Gamco Global Opportunity or generate 4.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Auer Growth Fund  vs.  Gamco Global Opportunity

Auer Growth Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Auer Growth Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Gamco Global Opportunity

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global Opportunity are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gamco Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Auer Growth and Gamco Global

The main advantage of trading using opposite Auer Growth and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth 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 Auer Growth Fund and Gamco Global Opportunity 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.