Correlation Between Gamco International and Gabelli Value

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

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

Diversification Opportunities for Gamco International and Gabelli Value

-0.33

Correlation Coefficient

Gamco International  Gabelli Value

Very good diversification

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

Pair Corralation between Gamco International and Gabelli Value

Assuming the 90 days horizon Gamco International is expected to generate 32.17 times less return on investment than Gabelli Value. But when comparing it to its historical volatility, Gamco International Growth is 1.11 times less risky than Gabelli Value. It trades about 0.0 of its potential returns per unit of risk. The Gabelli Value is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  652.00  in The Gabelli Value on September 23, 2024 and sell it today you would earn a total of  48.00  from holding The Gabelli Value or generate 7.36% return on investment over 90 days.

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

Gamco International Growth  vs.  The Gabelli Value

Gamco International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamco International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Gabelli Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Gabelli Value 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 International and Gabelli Value

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

The idea behind Gamco International Growth and The Gabelli Value 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..