Correlation Between GAMCO Global and Jutal Offshore

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

Diversification Opportunities for GAMCO Global and Jutal Offshore

-0.28

Correlation Coefficient

GAMCO Global  Jutal Offshore

Very good diversification

The 3 months correlation between GAMCO and Jutal is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil 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 Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of GAMCO Global i.e., GAMCO Global and Jutal Offshore go up and down completely randomly.

Pair Corralation between GAMCO Global and Jutal Offshore

Assuming the 90 days trading horizon GAMCO Global Gold is expected to under-perform the Jutal Offshore. But the preferred stock apears to be less risky and, when comparing its historical volatility, GAMCO Global Gold is 1.6 times less risky than Jutal Offshore. The preferred stock trades about -0.15 of its potential returns per unit of risk. The Jutal Offshore Oil is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,845  in Jutal Offshore Oil on September 17, 2024 and sell it today you would earn a total of  60.00  from holding Jutal Offshore Oil or generate 3.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

GAMCO Global Gold  vs.  Jutal Offshore Oil

GAMCO Global Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GAMCO Global Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Preferred Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Jutal Offshore Oil

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jutal Offshore Oil are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Jutal Offshore 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 Jutal Offshore

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

The idea behind GAMCO Global Gold and Jutal Offshore Oil 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.