Correlation Between BlackRock Floating and GAMCO Investors

Can any of the company-specific risk be diversified away by investing in both BlackRock Floating and GAMCO Investors 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 BlackRock Floating and GAMCO Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BlackRock Floating Rate and GAMCO Investors, you can compare the effects of market volatilities on BlackRock Floating and GAMCO Investors 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 BlackRock Floating with a short position of GAMCO Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Floating and GAMCO Investors.

Diversification Opportunities for BlackRock Floating and GAMCO Investors

0.0

Correlation Coefficient

BlackRock Floating  GAMCO Investors

Pay attention - limited upside

The 3 months correlation between BlackRock and GAMCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Floating Rate and GAMCO Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Investors and BlackRock Floating 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 BlackRock Floating Rate are associated (or correlated) with GAMCO Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMCO Investors has no effect on the direction of BlackRock Floating i.e., BlackRock Floating and GAMCO Investors go up and down completely randomly.

Pair Corralation between BlackRock Floating and GAMCO Investors

If you would invest (100.00) in GAMCO Investors on December 2, 2024 and sell it today you would earn a total of  100.00  from holding GAMCO Investors or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

BlackRock Floating Rate  vs.  GAMCO Investors

BlackRock Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Floating Rate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, BlackRock Floating is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

GAMCO Investors

Risk-Adjusted Performance

Very Weak

Over the last 90 days GAMCO Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, GAMCO Investors is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BlackRock Floating and GAMCO Investors

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

The idea behind BlackRock Floating Rate and GAMCO Investors 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.