Correlation Between Gamco Global and Deutsche Real

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

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

Diversification Opportunities for Gamco Global and Deutsche Real

0.53

Correlation Coefficient

Gamco Global  Deutsche Real

Very weak diversification

The 3 months correlation between Gamco and Deutsche is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Deutsche Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Real Estate 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 Gold are associated (or correlated) with Deutsche Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Real Estate has no effect on the direction of Gamco Global i.e., Gamco Global and Deutsche Real go up and down completely randomly.

Pair Corralation between Gamco Global and Deutsche Real

Assuming the 90 days horizon Gamco Global Gold is not expected to generate positive returns. However, Gamco Global Gold is 1.19 times less risky than Deutsche Real. It waists most of its returns potential to compensate for thr risk taken. Deutsche Real is generating about -0.04 per unit of risk. If you would invest  414.00  in Gamco Global Gold on December 2, 2024 and sell it today you would lose (1.00) from holding Gamco Global Gold or give up 0.24% of portfolio value over 90 days.

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

Gamco Global Gold  vs.  Deutsche Real Estate

Gamco Global Gold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gamco Global Gold 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.

Deutsche Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Deutsche Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Deutsche Real 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 Deutsche Real

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

The idea behind Gamco Global Gold and Deutsche Real Estate 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 Commodity Directory module to find actively traded commodities issued by global exchanges.