Correlation Between GAMCO Global and BCB Bancorp

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

Diversification Opportunities for GAMCO Global and BCB Bancorp

-0.39

Correlation Coefficient

GAMCO Global  BCB Bancorp

Very good diversification

The 3 months correlation between GAMCO and BCB is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and BCB Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCB Bancorp 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 BCB Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCB Bancorp has no effect on the direction of GAMCO Global i.e., GAMCO Global and BCB Bancorp go up and down completely randomly.

Pair Corralation between GAMCO Global and BCB Bancorp

Assuming the 90 days trading horizon GAMCO Global Gold is expected to generate 0.44 times more return on investment than BCB Bancorp. However, GAMCO Global Gold is 2.25 times less risky than BCB Bancorp. It trades about -0.29 of its potential returns per unit of risk. BCB Bancorp is currently generating about -0.3 per unit of risk. If you would invest  2,163  in GAMCO Global Gold on September 25, 2024 and sell it today you would lose (127.00) from holding GAMCO Global Gold or give up 5.87% of portfolio value over 90 days.

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

GAMCO Global Gold  vs.  BCB Bancorp

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.

BCB Bancorp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, BCB Bancorp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GAMCO Global and BCB Bancorp

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

The idea behind GAMCO Global Gold and BCB Bancorp 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.