Correlation Between GAMCO Global and Montana Technologies

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

By analyzing existing cross correlation between GAMCO Global Gold and Montana Technologies, you can compare the effects of market volatilities on GAMCO Global and Montana Technologies 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 Montana Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and Montana Technologies.

Diversification Opportunities for GAMCO Global and Montana Technologies

-0.78

Correlation Coefficient

GAMCO Global  Montana Technologies

Pay attention - limited upside

The 3 months correlation between GAMCO and Montana is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Montana Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montana Technologies 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 Gold are associated (or correlated) with Montana Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montana Technologies has no effect on the direction of GAMCO Global i.e., GAMCO Global and Montana Technologies go up and down completely randomly.

Pair Corralation between GAMCO Global and Montana Technologies

Assuming the 90 days trading horizon GAMCO Global is expected to generate 45.03 times less return on investment than Montana Technologies. But when comparing it to its historical volatility, GAMCO Global Gold is 5.43 times less risky than Montana Technologies. It trades about 0.01 of its potential returns per unit of risk. Montana Technologies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Montana Technologies on September 29, 2024 and sell it today you would earn a total of  79.00  from holding Montana Technologies or generate 131.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	41.06%
Values	Daily Returns

GAMCO Global Gold  vs.  Montana Technologies

GAMCO Global Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMCO Global Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Preferred Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Montana Technologies

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Montana Technologies are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating forward-looking indicators, Montana Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMCO Global and Montana Technologies

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

The idea behind GAMCO Global Gold and Montana Technologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.