Correlation Between Gamco International and Victory Incore

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

Diversification Opportunities for Gamco International and Victory Incore

0.09

Correlation Coefficient

Gamco International  Victory Incore

Significant diversification

The 3 months correlation between Gamco and Victory is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gamco International Growth and Victory Incore Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Incore Investment 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 Victory Incore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Incore Investment has no effect on the direction of Gamco International i.e., Gamco International and Victory Incore go up and down completely randomly.

Pair Corralation between Gamco International and Victory Incore

Assuming the 90 days horizon Gamco International Growth is expected to under-perform the Victory Incore. In addition to that, Gamco International is 3.28 times more volatile than Victory Incore Investment. It trades about -0.33 of its total potential returns per unit of risk. Victory Incore Investment is currently generating about -0.3 per unit of volatility. If you would invest  1,843  in Victory Incore Investment on October 12, 2024 and sell it today you would lose (51.00) from holding Victory Incore Investment or give up 2.77% of portfolio value over 90 days.

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

Gamco International Growth  vs.  Victory Incore Investment

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 weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Victory Incore Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Victory Incore Investment has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Victory Incore 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 Victory Incore

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

The idea behind Gamco International Growth and Victory Incore Investment 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.