Correlation Between Gamco Global and Conquer Risk

Can any of the company-specific risk be diversified away by investing in both Gamco Global and Conquer Risk 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 Conquer Risk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gamco Global Growth and Conquer Risk Defensive, you can compare the effects of market volatilities on Gamco Global and Conquer Risk 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 Conquer Risk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Conquer Risk.

Diversification Opportunities for Gamco Global and Conquer Risk

0.82

Correlation Coefficient

Gamco Global  Conquer Risk

Very poor diversification

The 3 months correlation between Gamco and Conquer is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Growth and Conquer Risk Defensive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conquer Risk Defensive 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 Growth are associated (or correlated) with Conquer Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conquer Risk Defensive has no effect on the direction of Gamco Global i.e., Gamco Global and Conquer Risk go up and down completely randomly.

Pair Corralation between Gamco Global and Conquer Risk

Assuming the 90 days horizon Gamco Global is expected to generate 21.05 times less return on investment than Conquer Risk. But when comparing it to its historical volatility, Gamco Global Growth is 1.11 times less risky than Conquer Risk. It trades about 0.0 of its potential returns per unit of risk. Conquer Risk Defensive is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,254  in Conquer Risk Defensive on October 15, 2024 and sell it today you would earn a total of  29.00  from holding Conquer Risk Defensive or generate 2.31% return on investment over 90 days.

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

Gamco Global Growth  vs.  Conquer Risk Defensive

Gamco Global Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamco Global Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Gamco Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Conquer Risk Defensive

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Conquer Risk Defensive are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Conquer Risk 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 Conquer Risk

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

The idea behind Gamco Global Growth and Conquer Risk Defensive 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.