Correlation Between Bny Mellon and Gamco Global

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

By analyzing existing cross correlation between Bny Mellon Emerging and Gamco Global Gold, you can compare the effects of market volatilities on Bny Mellon and Gamco Global 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 Bny Mellon with a short position of Gamco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bny Mellon and Gamco Global.

Diversification Opportunities for Bny Mellon and Gamco Global

0.83

Correlation Coefficient

Bny Mellon  Gamco Global

Very poor diversification

The 3 months correlation between Bny and Gamco is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Bny Mellon Emerging and Gamco Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Gold and Bny Mellon 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 Bny Mellon Emerging are associated (or correlated) with Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global Gold has no effect on the direction of Bny Mellon i.e., Bny Mellon and Gamco Global go up and down completely randomly.

Pair Corralation between Bny Mellon and Gamco Global

Assuming the 90 days horizon Bny Mellon Emerging is expected to under-perform the Gamco Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Bny Mellon Emerging is 1.29 times less risky than Gamco Global. The mutual fund trades about -0.34 of its potential returns per unit of risk. The Gamco Global Gold is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  423.00  in Gamco Global Gold on September 3, 2024 and sell it today you would lose (6.00) from holding Gamco Global Gold or give up 1.42% of portfolio value over 90 days.

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

Bny Mellon Emerging  vs.  Gamco Global Gold

Bny Mellon Emerging

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bny Mellon Emerging are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Bny Mellon is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gamco Global Gold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global Gold are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gamco Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bny Mellon and Gamco Global

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

The idea behind Bny Mellon Emerging and Gamco Global Gold 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.