Correlation Between Gamco Global and Grizzly Short

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

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

Diversification Opportunities for Gamco Global and Grizzly Short

0.33

Correlation Coefficient

Gamco Global  Grizzly Short

Weak diversification

The 3 months correlation between Gamco and Grizzly is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Gamco Global and Grizzly Short Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grizzly Short 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 The Gamco Global are associated (or correlated) with Grizzly Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grizzly Short has no effect on the direction of Gamco Global i.e., Gamco Global and Grizzly Short go up and down completely randomly.

Pair Corralation between Gamco Global and Grizzly Short

Assuming the 90 days horizon The Gamco Global is expected to generate 0.79 times more return on investment than Grizzly Short. However, The Gamco Global is 1.26 times less risky than Grizzly Short. It trades about 0.13 of its potential returns per unit of risk. Grizzly Short Fund is currently generating about 0.1 per unit of risk. If you would invest  2,473  in The Gamco Global on December 29, 2024 and sell it today you would earn a total of  142.00  from holding The Gamco Global or generate 5.74% return on investment over 90 days.

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

The Gamco Global  vs.  Grizzly Short Fund

Gamco Global

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gamco Global are ranked lower than 9 (%) 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.

Grizzly Short

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grizzly Short Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Grizzly Short 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 Grizzly Short

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

The idea behind The Gamco Global and Grizzly Short Fund 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.