Correlation Between GAMCO Global and INGERSOLL

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

Diversification Opportunities for GAMCO Global and INGERSOLL

-0.48
  Correlation Coefficient

Very good diversification

The 3 months correlation between GAMCO and INGERSOLL is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and INGERSOLL RAND LUXEMBOURG FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INGERSOLL RAND LUXEM 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 INGERSOLL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INGERSOLL RAND LUXEM has no effect on the direction of GAMCO Global i.e., GAMCO Global and INGERSOLL go up and down completely randomly.

Pair Corralation between GAMCO Global and INGERSOLL

Assuming the 90 days trading horizon GAMCO Global Gold is expected to generate 0.49 times more return on investment than INGERSOLL. However, GAMCO Global Gold is 2.02 times less risky than INGERSOLL. It trades about -0.2 of its potential returns per unit of risk. INGERSOLL RAND LUXEMBOURG FIN is currently generating about -0.12 per unit of risk. If you would invest  2,199  in GAMCO Global Gold on September 19, 2024 and sell it today you would lose (90.00) from holding GAMCO Global Gold or give up 4.09% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy38.1%
ValuesDaily Returns

GAMCO Global Gold  vs.  INGERSOLL RAND LUXEMBOURG FIN

 Performance 
       Timeline  
GAMCO Global Gold 

Risk-Adjusted Performance

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Strong
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 inconsistent 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.
INGERSOLL RAND LUXEM 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days INGERSOLL RAND LUXEMBOURG FIN has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Bond'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 INGERSOLL RAND LUXEMBOURG FIN investors.

GAMCO Global and INGERSOLL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GAMCO Global and INGERSOLL

The main advantage of trading using opposite GAMCO Global and INGERSOLL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Global position performs unexpectedly, INGERSOLL 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 INGERSOLL will offset losses from the drop in INGERSOLL's long position.
The idea behind GAMCO Global Gold and INGERSOLL RAND LUXEMBOURG FIN 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.

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