Correlation Between Cullen Enhanced and Gamco Global

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

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

Diversification Opportunities for Cullen Enhanced and Gamco Global

0.73

Correlation Coefficient

Cullen Enhanced  Gamco Global

Poor diversification

The 3 months correlation between Cullen and Gamco is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Enhanced Equity 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 Cullen Enhanced 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 Cullen Enhanced Equity 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 Cullen Enhanced i.e., Cullen Enhanced and Gamco Global go up and down completely randomly.

Pair Corralation between Cullen Enhanced and Gamco Global

Assuming the 90 days horizon Cullen Enhanced is expected to generate 2.52 times less return on investment than Gamco Global. But when comparing it to its historical volatility, Cullen Enhanced Equity is 1.12 times less risky than Gamco Global. It trades about 0.13 of its potential returns per unit of risk. Gamco Global Gold is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  384.00  in Gamco Global Gold on December 20, 2024 and sell it today you would earn a total of  49.00  from holding Gamco Global Gold or generate 12.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Cullen Enhanced Equity  vs.  Gamco Global Gold

Cullen Enhanced Equity

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cullen Enhanced Equity are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Cullen Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gamco Global Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global Gold are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gamco Global showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cullen Enhanced and Gamco Global

The main advantage of trading using opposite Cullen Enhanced and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Enhanced 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 Cullen Enhanced Equity 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.