Correlation Between Gamco Global and Gabelli Dividend

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

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

Diversification Opportunities for Gamco Global and Gabelli Dividend

-0.78

Correlation Coefficient

Gamco Global  Gabelli Dividend

Pay attention - limited upside

The 3 months correlation between Gamco and Gabelli is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Opportunity and The Gabelli Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend and Gamco Global 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 Gamco Global Opportunity are associated (or correlated) with Gabelli Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend has no effect on the direction of Gamco Global i.e., Gamco Global and Gabelli Dividend go up and down completely randomly.

Pair Corralation between Gamco Global and Gabelli Dividend

Assuming the 90 days horizon Gamco Global is expected to generate 1.06 times less return on investment than Gabelli Dividend. In addition to that, Gamco Global is 1.26 times more volatile than The Gabelli Dividend. It trades about 0.06 of its total potential returns per unit of risk. The Gabelli Dividend is currently generating about 0.09 per unit of volatility. If you would invest  1,962  in The Gabelli Dividend on September 13, 2024 and sell it today you would earn a total of  16.00  from holding The Gabelli Dividend or generate 0.82% return on investment over 90 days.

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

Gamco Global Opportunity  vs.  The Gabelli Dividend

Gamco Global Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamco Global Opportunity has generated negative risk-adjusted returns adding no value to fund investors. 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.

Gabelli Dividend

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Dividend are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Gabelli Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gamco Global and Gabelli Dividend

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

The idea behind Gamco Global Opportunity and The Gabelli Dividend 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.