Correlation Between Pinterest and GAMCO Global

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

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

Diversification Opportunities for Pinterest and GAMCO Global

0.3

Correlation Coefficient

Pinterest  GAMCO Global

Weak diversification

The 3 months correlation between Pinterest and GAMCO is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest 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 Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and GAMCO Global go up and down completely randomly.

Pair Corralation between Pinterest and GAMCO Global

Given the investment horizon of 90 days Pinterest is expected to under-perform the GAMCO Global. In addition to that, Pinterest is 2.41 times more volatile than GAMCO Global Gold. It trades about -0.01 of its total potential returns per unit of risk. GAMCO Global Gold is currently generating about 0.01 per unit of volatility. If you would invest  2,182  in GAMCO Global Gold on August 31, 2024 and sell it today you would earn a total of  2.00  from holding GAMCO Global Gold or generate 0.09% return on investment over 90 days.

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

Pinterest  vs.  GAMCO Global Gold

Pinterest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pinterest and GAMCO Global

The main advantage of trading using opposite Pinterest and GAMCO Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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 Pinterest 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..