Correlation Between Gamco Global and Mutual Quest

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

Diversification Opportunities for Gamco Global and Mutual Quest

0.58

Correlation Coefficient

Gamco Global  Mutual Quest

Very weak diversification

The 3 months correlation between Gamco and Mutual is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Telecommunication and Mutual Quest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mutual Quest 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 Mutual Quest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mutual Quest has no effect on the direction of Gamco Global i.e., Gamco Global and Mutual Quest go up and down completely randomly.

Pair Corralation between Gamco Global and Mutual Quest

Assuming the 90 days horizon Gamco Global is expected to generate 25.76 times less return on investment than Mutual Quest. In addition to that, Gamco Global is 1.68 times more volatile than Mutual Quest. It trades about 0.0 of its total potential returns per unit of risk. Mutual Quest is currently generating about 0.19 per unit of volatility. If you would invest  1,390  in Mutual Quest on December 21, 2024 and sell it today you would earn a total of  88.00  from holding Mutual Quest or generate 6.33% return on investment over 90 days.

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

Gamco Global Telecommunication  vs.  Mutual Quest

Gamco Global Telecom

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamco Global Telecommunications 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.

Mutual Quest

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mutual Quest are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mutual Quest may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gamco Global and Mutual Quest

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

The idea behind Gamco Global Telecommunications and Mutual Quest 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.