Correlation Between GAMCO Global and NISOURCE

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

Diversification Opportunities for GAMCO Global and NISOURCE

-0.09

Correlation Coefficient

GAMCO Global  NISOURCE

Good diversification

The 3 months correlation between GAMCO and NISOURCE is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P 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 NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of GAMCO Global i.e., GAMCO Global and NISOURCE go up and down completely randomly.

Pair Corralation between GAMCO Global and NISOURCE

Assuming the 90 days trading horizon GAMCO Global Gold is expected to generate 0.63 times more return on investment than NISOURCE. However, GAMCO Global Gold is 1.58 times less risky than NISOURCE. It trades about 0.06 of its potential returns per unit of risk. NISOURCE FIN P is currently generating about -0.01 per unit of risk. If you would invest  2,021  in GAMCO Global Gold on December 30, 2024 and sell it today you would earn a total of  61.00  from holding GAMCO Global Gold or generate 3.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	74.19%
Values	Daily Returns

GAMCO Global Gold  vs.  NISOURCE FIN P

GAMCO Global Gold

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GAMCO Global Gold are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

NISOURCE FIN P

Risk-Adjusted Performance

OK

Over the last 90 days NISOURCE FIN P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NISOURCE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GAMCO Global and NISOURCE

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

The idea behind GAMCO Global Gold and NISOURCE FIN P 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.