Correlation Between Placer Creek and GAMCO Global

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

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

Diversification Opportunities for Placer Creek and GAMCO Global

0.0

Correlation Coefficient

Placer Creek  GAMCO Global

Pay attention - limited upside

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

Pair Corralation between Placer Creek and GAMCO Global

If you would invest  2,195  in GAMCO Global Gold on September 2, 2024 and sell it today you would earn a total of  3.00  from holding GAMCO Global Gold or generate 0.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Placer Creek Mining  vs.  GAMCO Global Gold

Placer Creek Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Placer Creek Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Placer Creek is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

GAMCO Global Gold

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GAMCO Global Gold are ranked lower than 1 (%) 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.

Pair Trading with Placer Creek and GAMCO Global

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

The idea behind Placer Creek Mining and GAMCO Global Gold 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..