Correlation Between GAMCO Global and Kayne Anderson

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

Diversification Opportunities for GAMCO Global and Kayne Anderson

-0.48

Correlation Coefficient

GAMCO Global  Kayne Anderson

Very good diversification

The 3 months correlation between GAMCO and Kayne is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Kayne Anderson MLP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kayne Anderson MLP 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 Kayne Anderson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kayne Anderson MLP has no effect on the direction of GAMCO Global i.e., GAMCO Global and Kayne Anderson go up and down completely randomly.

Pair Corralation between GAMCO Global and Kayne Anderson

Assuming the 90 days trading horizon GAMCO Global is expected to generate 1054.5 times less return on investment than Kayne Anderson. But when comparing it to its historical volatility, GAMCO Global Gold is 1.09 times less risky than Kayne Anderson. It trades about 0.0 of its potential returns per unit of risk. Kayne Anderson MLP is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  1,040  in Kayne Anderson MLP on September 4, 2024 and sell it today you would earn a total of  316.00  from holding Kayne Anderson MLP or generate 30.38% return on investment over 90 days.

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

GAMCO Global Gold  vs.  Kayne Anderson MLP

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 somewhat strong basic indicators, GAMCO Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Kayne Anderson MLP

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Kayne Anderson MLP are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Kayne Anderson displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GAMCO Global and Kayne Anderson

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

The idea behind GAMCO Global Gold and Kayne Anderson MLP 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.