Correlation Between Gamco Natural and Tiaa Cref

Can any of the company-specific risk be diversified away by investing in both Gamco Natural and Tiaa Cref 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 Tiaa Cref 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 Tiaa Cref Emerging Markets, you can compare the effects of market volatilities on Gamco Natural and Tiaa Cref 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 Tiaa Cref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Tiaa Cref.

Diversification Opportunities for Gamco Natural and Tiaa Cref

0.77

Correlation Coefficient

Gamco Natural  Tiaa Cref

Poor diversification

The 3 months correlation between Gamco and Tiaa is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Tiaa Cref Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref Emerging 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 Tiaa Cref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref Emerging has no effect on the direction of Gamco Natural i.e., Gamco Natural and Tiaa Cref go up and down completely randomly.

Pair Corralation between Gamco Natural and Tiaa Cref

Assuming the 90 days horizon Gamco Natural Resources is expected to under-perform the Tiaa Cref. In addition to that, Gamco Natural is 2.74 times more volatile than Tiaa Cref Emerging Markets. It trades about 0.0 of its total potential returns per unit of risk. Tiaa Cref Emerging Markets is currently generating about 0.11 per unit of volatility. If you would invest  715.00  in Tiaa Cref Emerging Markets on September 30, 2024 and sell it today you would earn a total of  135.00  from holding Tiaa Cref Emerging Markets or generate 18.88% return on investment over 90 days.

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

Gamco Natural Resources  vs.  Tiaa Cref Emerging Markets

Gamco Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamco Natural Resources has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Tiaa Cref Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tiaa Cref Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tiaa Cref is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gamco Natural and Tiaa Cref

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

The idea behind Gamco Natural Resources and Tiaa Cref Emerging Markets 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.