Correlation Between GAMCO Global and BTC Digital

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

Diversification Opportunities for GAMCO Global and BTC Digital

0.46

Correlation Coefficient

GAMCO Global  BTC Digital

Very weak diversification

The 3 months correlation between GAMCO and BTC is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and BTC Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTC Digital 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 BTC Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTC Digital has no effect on the direction of GAMCO Global i.e., GAMCO Global and BTC Digital go up and down completely randomly.

Pair Corralation between GAMCO Global and BTC Digital

Assuming the 90 days trading horizon GAMCO Global Gold is expected to generate 0.14 times more return on investment than BTC Digital. However, GAMCO Global Gold is 7.04 times less risky than BTC Digital. It trades about 0.08 of its potential returns per unit of risk. BTC Digital is currently generating about -0.33 per unit of risk. If you would invest  2,096  in GAMCO Global Gold on December 4, 2024 and sell it today you would earn a total of  23.00  from holding GAMCO Global Gold or generate 1.1% return on investment over 90 days.

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

GAMCO Global Gold  vs.  BTC Digital

GAMCO Global Gold

Risk-Adjusted Performance

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 somewhat strong basic indicators, GAMCO Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

BTC Digital

Risk-Adjusted Performance

Very Weak

Over the last 90 days BTC Digital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GAMCO Global and BTC Digital

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

The idea behind GAMCO Global Gold and BTC Digital 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.