Correlation Between Gamco Global and Copeland Smid

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

By analyzing existing cross correlation between Gamco Global Telecommunications and Copeland Smid Cap, you can compare the effects of market volatilities on Gamco Global and Copeland Smid 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 Copeland Smid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Copeland Smid.

Diversification Opportunities for Gamco Global and Copeland Smid

0.0

Correlation Coefficient

Gamco Global  Copeland Smid

Pay attention - limited upside

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

Pair Corralation between Gamco Global and Copeland Smid

Assuming the 90 days horizon Gamco Global Telecommunications is expected to generate 0.79 times more return on investment than Copeland Smid. However, Gamco Global Telecommunications is 1.27 times less risky than Copeland Smid. It trades about 0.1 of its potential returns per unit of risk. Copeland Smid Cap is currently generating about -0.07 per unit of risk. If you would invest  2,169  in Gamco Global Telecommunications on December 27, 2024 and sell it today you would earn a total of  93.00  from holding Gamco Global Telecommunications or generate 4.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gamco Global Telecommunication  vs.  Copeland Smid Cap

Gamco Global Telecom

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global Telecommunications are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. 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.

Copeland Smid Cap

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gamco Global and Copeland Smid

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

The idea behind Gamco Global Telecommunications and Copeland Smid Cap 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.