Correlation Between GAMCO Global and FREEPORT

Can any of the company-specific risk be diversified away by investing in both GAMCO Global and FREEPORT 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 FREEPORT 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 FREEPORT MCMORAN INC 4625, you can compare the effects of market volatilities on GAMCO Global and FREEPORT 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 FREEPORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Global and FREEPORT.

Diversification Opportunities for GAMCO Global and FREEPORT

0.58

Correlation Coefficient

GAMCO Global  FREEPORT

Very weak diversification

The 3 months correlation between GAMCO and FREEPORT is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and FREEPORT MCMORAN INC 4625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FREEPORT MCMORAN INC 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 FREEPORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FREEPORT MCMORAN INC has no effect on the direction of GAMCO Global i.e., GAMCO Global and FREEPORT go up and down completely randomly.

Pair Corralation between GAMCO Global and FREEPORT

Assuming the 90 days trading horizon GAMCO Global Gold is expected to under-perform the FREEPORT. But the preferred stock apears to be less risky and, when comparing its historical volatility, GAMCO Global Gold is 1.28 times less risky than FREEPORT. The preferred stock trades about -0.28 of its potential returns per unit of risk. The FREEPORT MCMORAN INC 4625 is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest  9,795  in FREEPORT MCMORAN INC 4625 on September 25, 2024 and sell it today you would lose (528.00) from holding FREEPORT MCMORAN INC 4625 or give up 5.39% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

GAMCO Global Gold  vs.  FREEPORT MCMORAN INC 4625

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.

FREEPORT MCMORAN INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FREEPORT MCMORAN INC 4625 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for FREEPORT MCMORAN INC 4625 investors.

Pair Trading with GAMCO Global and FREEPORT

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

The idea behind GAMCO Global Gold and FREEPORT MCMORAN INC 4625 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.