Correlation Between SCOR PK and GAMCO Global

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

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

Diversification Opportunities for SCOR PK and GAMCO Global

-0.4

Correlation Coefficient

SCOR PK  GAMCO Global

Very good diversification

The 3 months correlation between SCOR and GAMCO is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK 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 SCOR PK 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 SCOR PK 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 SCOR PK i.e., SCOR PK and GAMCO Global go up and down completely randomly.

Pair Corralation between SCOR PK and GAMCO Global

Assuming the 90 days horizon SCOR PK is expected to generate 3.09 times more return on investment than GAMCO Global. However, SCOR PK is 3.09 times more volatile than GAMCO Global Gold. It trades about 0.01 of its potential returns per unit of risk. GAMCO Global Gold is currently generating about -0.15 per unit of risk. If you would invest  248.00  in SCOR PK on October 4, 2024 and sell it today you would lose (1.00) from holding SCOR PK or give up 0.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SCOR PK  vs.  GAMCO Global Gold

SCOR PK

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SCOR PK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, SCOR PK may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GAMCO Global Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMCO Global Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with SCOR PK and GAMCO Global

The main advantage of trading using opposite SCOR PK and GAMCO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK 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 SCOR PK 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.