Correlation Between GAMCO Natural and Blackrock Debt

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

Diversification Opportunities for GAMCO Natural and Blackrock Debt

-0.29

Correlation Coefficient

GAMCO Natural  Blackrock Debt

Very good diversification

The 3 months correlation between GAMCO and Blackrock is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Natural Resources and Blackrock Debt Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Debt Strategies 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 Blackrock Debt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Debt Strategies has no effect on the direction of GAMCO Natural i.e., GAMCO Natural and Blackrock Debt go up and down completely randomly.

Pair Corralation between GAMCO Natural and Blackrock Debt

Considering the 90-day investment horizon GAMCO Natural Resources is expected to under-perform the Blackrock Debt. In addition to that, GAMCO Natural is 2.02 times more volatile than Blackrock Debt Strategies. It trades about -0.14 of its total potential returns per unit of risk. Blackrock Debt Strategies is currently generating about -0.07 per unit of volatility. If you would invest  1,089  in Blackrock Debt Strategies on October 15, 2024 and sell it today you would lose (10.00) from holding Blackrock Debt Strategies or give up 0.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

GAMCO Natural Resources  vs.  Blackrock Debt Strategies

GAMCO Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMCO Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GAMCO Natural is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Blackrock Debt Strategies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Debt Strategies has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Blackrock Debt is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GAMCO Natural and Blackrock Debt

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

The idea behind GAMCO Natural Resources and Blackrock Debt Strategies 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.