Correlation Between GAMCO Natural and CBH

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

By analyzing existing cross correlation between GAMCO Natural Resources and CBH, you can compare the effects of market volatilities on GAMCO Natural and CBH 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 Natural with a short position of CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Natural and CBH.

Diversification Opportunities for GAMCO Natural and CBH

0.0

Correlation Coefficient

GAMCO Natural  CBH

Pay attention - limited upside

The 3 months correlation between GAMCO and CBH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Natural Resources and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and GAMCO Natural 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 Natural Resources are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of GAMCO Natural i.e., GAMCO Natural and CBH go up and down completely randomly.

Pair Corralation between GAMCO Natural and CBH

If you would invest  531.00  in GAMCO Natural Resources on December 26, 2024 and sell it today you would earn a total of  67.00  from holding GAMCO Natural Resources or generate 12.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

GAMCO Natural Resources  vs.  CBH

GAMCO Natural Resources

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GAMCO Natural Resources are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, GAMCO Natural may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CBH

Risk-Adjusted Performance

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with GAMCO Natural and CBH

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

The idea behind GAMCO Natural Resources and CBH 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.