Correlation Between Gamco Global and Kopernik Global

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

Diversification Opportunities for Gamco Global and Kopernik Global

-0.28

Correlation Coefficient

Gamco Global  Kopernik Global

Very good diversification

The 3 months correlation between Gamco and Kopernik is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Telecommunication and Kopernik Global All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik Global All 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 Kopernik Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik Global All has no effect on the direction of Gamco Global i.e., Gamco Global and Kopernik Global go up and down completely randomly.

Pair Corralation between Gamco Global and Kopernik Global

Assuming the 90 days horizon Gamco Global Telecommunications is expected to generate 0.81 times more return on investment than Kopernik Global. However, Gamco Global Telecommunications is 1.23 times less risky than Kopernik Global. It trades about 0.18 of its potential returns per unit of risk. Kopernik Global All Cap is currently generating about -0.04 per unit of risk. If you would invest  2,230  in Gamco Global Telecommunications on September 17, 2024 and sell it today you would earn a total of  151.00  from holding Gamco Global Telecommunications or generate 6.77% return on investment over 90 days.

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

Gamco Global Telecommunication  vs.  Kopernik Global All Cap

Gamco Global Telecom

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global Telecommunications are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gamco Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kopernik Global All

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kopernik Global All Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Kopernik 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 Gamco Global and Kopernik Global

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

The idea behind Gamco Global Telecommunications and Kopernik Global All 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 Stocks Directory module to find actively traded stocks across global markets.