Correlation Between Gamco Natural and Bear Profund

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

Diversification Opportunities for Gamco Natural and Bear Profund

0.29

Correlation Coefficient

Gamco Natural  Bear Profund

Modest diversification

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

Pair Corralation between Gamco Natural and Bear Profund

Assuming the 90 days horizon Gamco Natural Resources is expected to generate 0.62 times more return on investment than Bear Profund. However, Gamco Natural Resources is 1.61 times less risky than Bear Profund. It trades about 0.31 of its potential returns per unit of risk. Bear Profund Bear is currently generating about 0.07 per unit of risk. If you would invest  597.00  in Gamco Natural Resources on December 28, 2024 and sell it today you would earn a total of  72.00  from holding Gamco Natural Resources or generate 12.06% return on investment over 90 days.

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

Gamco Natural Resources  vs.  Bear Profund Bear

Gamco Natural Resources

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Natural Resources are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gamco Natural may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Bear Profund Bear

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bear Profund Bear are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Bear Profund 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 Natural and Bear Profund

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

The idea behind Gamco Natural Resources and Bear Profund Bear 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.