Correlation Between Gamco Global and Blackrock International

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

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

Diversification Opportunities for Gamco Global and Blackrock International

-0.01

Correlation Coefficient

Gamco Global  Blackrock International

Good diversification

The 3 months correlation between Gamco and Blackrock is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global and Blackrock International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock International 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 are associated (or correlated) with Blackrock International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock International has no effect on the direction of Gamco Global i.e., Gamco Global and Blackrock International go up and down completely randomly.

Pair Corralation between Gamco Global and Blackrock International

Considering the 90-day investment horizon Gamco Global is expected to generate 1.53 times more return on investment than Blackrock International. However, Gamco Global is 1.53 times more volatile than Blackrock International Growth. It trades about 0.17 of its potential returns per unit of risk. Blackrock International Growth is currently generating about -0.04 per unit of risk. If you would invest  390.00  in Gamco Global on February 2, 2024 and sell it today you would earn a total of  16.00  from holding Gamco Global or generate 4.1% return on investment over 90 days.

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

Gamco Global  vs.  Blackrock International Growth

Gamco Global

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Gamco Global may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Blackrock International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Blackrock International Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Blackrock International is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gamco Global and Blackrock International

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

The idea behind Gamco Global and Blackrock International Growth 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.