Correlation Between Infrastructure Fund and Gamco Global

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

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

Diversification Opportunities for Infrastructure Fund and Gamco Global

0.94

Correlation Coefficient

Infrastructure Fund  Gamco Global

Almost no diversification

The 3 months correlation between Infrastructure and Gamco is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Infrastructure Fund Retail and The Gamco Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global and Infrastructure Fund 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 Infrastructure Fund Retail 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 Infrastructure Fund i.e., Infrastructure Fund and Gamco Global go up and down completely randomly.

Pair Corralation between Infrastructure Fund and Gamco Global

Assuming the 90 days horizon Infrastructure Fund Retail is expected to under-perform the Gamco Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Infrastructure Fund Retail is 1.74 times less risky than Gamco Global. The mutual fund trades about -0.02 of its potential returns per unit of risk. The The Gamco Global is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,601  in The Gamco Global on December 1, 2024 and sell it today you would earn a total of  26.00  from holding The Gamco Global or generate 1.0% return on investment over 90 days.

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

Infrastructure Fund Retail  vs.  The Gamco Global

Infrastructure Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infrastructure Fund Retail has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Infrastructure Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gamco Global

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Gamco Global are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental 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 Infrastructure Fund and Gamco Global

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

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.