Correlation Between Ellsworth Growth and GAMCO Global

Can any of the company-specific risk be diversified away by investing in both Ellsworth 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 Ellsworth 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 Ellsworth Growth and and GAMCO Global Gold, you can compare the effects of market volatilities on Ellsworth 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 Ellsworth Growth with a short position of GAMCO Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellsworth Growth and GAMCO Global.

Diversification Opportunities for Ellsworth Growth and GAMCO Global

0.39

Correlation Coefficient

Ellsworth Growth  GAMCO Global

Weak diversification

The 3 months correlation between Ellsworth and GAMCO is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ellsworth Growth and and GAMCO Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMCO Global Gold and Ellsworth 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 Ellsworth Growth and 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 Gold has no effect on the direction of Ellsworth Growth i.e., Ellsworth Growth and GAMCO Global go up and down completely randomly.

Pair Corralation between Ellsworth Growth and GAMCO Global

Assuming the 90 days trading horizon Ellsworth Growth and is expected to under-perform the GAMCO Global. In addition to that, Ellsworth Growth is 2.22 times more volatile than GAMCO Global Gold. It trades about -0.19 of its total potential returns per unit of risk. GAMCO Global Gold is currently generating about -0.14 per unit of volatility. If you would invest  2,127  in GAMCO Global Gold on October 12, 2024 and sell it today you would lose (45.00) from holding GAMCO Global Gold or give up 2.12% of portfolio value over 90 days.

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

Ellsworth Growth and  vs.  GAMCO Global Gold

Ellsworth Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ellsworth Growth and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

GAMCO Global Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMCO Global Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Ellsworth Growth and GAMCO Global

The main advantage of trading using opposite Ellsworth Growth and GAMCO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellsworth 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 Ellsworth Growth and and GAMCO Global Gold 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.