Correlation Between GAMCO Natural and Embassy Bancorp
Can any of the company-specific risk be diversified away by investing in both GAMCO Natural and Embassy Bancorp 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 Embassy Bancorp 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 Embassy Bancorp, you can compare the effects of market volatilities on GAMCO Natural and Embassy Bancorp 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 Embassy Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMCO Natural and Embassy Bancorp.
Diversification Opportunities for GAMCO Natural and Embassy Bancorp
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GAMCO and Embassy is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Natural Resources and Embassy Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embassy Bancorp 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 Embassy Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embassy Bancorp has no effect on the direction of GAMCO Natural i.e., GAMCO Natural and Embassy Bancorp go up and down completely randomly.
Pair Corralation between GAMCO Natural and Embassy Bancorp
Considering the 90-day investment horizon GAMCO Natural Resources is expected to generate 0.54 times more return on investment than Embassy Bancorp. However, GAMCO Natural Resources is 1.85 times less risky than Embassy Bancorp. It trades about 0.05 of its potential returns per unit of risk. Embassy Bancorp is currently generating about -0.02 per unit of risk. If you would invest 411.00 in GAMCO Natural Resources on March 21, 2024 and sell it today you would earn a total of 120.00 from holding GAMCO Natural Resources or generate 29.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GAMCO Natural Resources vs. Embassy Bancorp
Performance |
Timeline |
GAMCO Natural Resources |
Embassy Bancorp |
GAMCO Natural and Embassy Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GAMCO Natural and Embassy Bancorp
The main advantage of trading using opposite GAMCO Natural and Embassy Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMCO Natural position performs unexpectedly, Embassy Bancorp 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 Embassy Bancorp will offset losses from the drop in Embassy Bancorp's long position.GAMCO Natural vs. Blackrock Muniholdings Closed | GAMCO Natural vs. BlackRock Limited Duration | GAMCO Natural vs. Pimco Corporate Income | GAMCO Natural vs. Brightsphere Investment Group |
Embassy Bancorp vs. Pimco Corporate Income | Embassy Bancorp vs. BlackRock Core Bond | Embassy Bancorp vs. Brightsphere Investment Group | Embassy Bancorp vs. Blackrock Muniholdings Closed |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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