Correlation Between Gamco Global and Smead Funds
Can any of the company-specific risk be diversified away by investing in both Gamco Global and Smead Funds 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 Smead Funds 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 Smead Funds Trust, you can compare the effects of market volatilities on Gamco Global and Smead Funds 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 Smead Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and Smead Funds.
Diversification Opportunities for Gamco Global and Smead Funds
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gamco and Smead is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Gold and Smead Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Funds Trust 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 Smead Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Funds Trust has no effect on the direction of Gamco Global i.e., Gamco Global and Smead Funds go up and down completely randomly.
Pair Corralation between Gamco Global and Smead Funds
Assuming the 90 days horizon Gamco Global Gold is not expected to generate positive returns. Moreover, Gamco Global is 1.07 times more volatile than Smead Funds Trust. It trades away all of its potential returns to assume current level of volatility. Smead Funds Trust is currently generating about 0.07 per unit of risk. If you would invest 5,470 in Smead Funds Trust on December 2, 2024 and sell it today you would earn a total of 197.00 from holding Smead Funds Trust or generate 3.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Gamco Global Gold vs. Smead Funds Trust
Performance |
Timeline |
Gamco Global Gold |
Smead Funds Trust |
Gamco Global and Smead Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gamco Global and Smead Funds
The main advantage of trading using opposite Gamco Global and Smead Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Global position performs unexpectedly, Smead Funds 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 Smead Funds will offset losses from the drop in Smead Funds' long position.Gamco Global vs. Us Global Investors | Gamco Global vs. Barings Global Floating | Gamco Global vs. T Rowe Price | Gamco Global vs. Alliancebernstein Global Highome |
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Check out your portfolio center.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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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