Correlation Between GAMCO Global and Gap,

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

Diversification Opportunities for GAMCO Global and Gap,

-0.65

Correlation Coefficient

GAMCO Global  Gap,

Excellent diversification

The 3 months correlation between GAMCO and Gap, is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, 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 Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of GAMCO Global i.e., GAMCO Global and Gap, go up and down completely randomly.

Pair Corralation between GAMCO Global and Gap,

Assuming the 90 days trading horizon GAMCO Global Gold is expected to generate 0.62 times more return on investment than Gap,. However, GAMCO Global Gold is 1.63 times less risky than Gap,. It trades about -0.06 of its potential returns per unit of risk. The Gap, is currently generating about -0.22 per unit of risk. If you would invest  2,139  in GAMCO Global Gold on October 4, 2024 and sell it today you would lose (31.00) from holding GAMCO Global Gold or give up 1.45% of portfolio value over 90 days.

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

GAMCO Global Gold  vs.  The Gap,

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 latest unfluctuating performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Gap,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Gap, reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMCO Global and Gap,

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

The idea behind GAMCO Global Gold and The Gap, 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.