Correlation Between Gamco Global and The Arbitrage

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

By analyzing existing cross correlation between Gamco Global Telecommunications and The Arbitrage Event Driven, you can compare the effects of market volatilities on Gamco Global and The Arbitrage 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 The Arbitrage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Global and The Arbitrage.

Diversification Opportunities for Gamco Global and The Arbitrage

0.97

Correlation Coefficient

Gamco Global  The Arbitrage

Almost no diversification

The 3 months correlation between Gamco and THE is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Global Telecommunication and The Arbitrage Event Driven in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Event 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 Telecommunications are associated (or correlated) with The Arbitrage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Event has no effect on the direction of Gamco Global i.e., Gamco Global and The Arbitrage go up and down completely randomly.

Pair Corralation between Gamco Global and The Arbitrage

Assuming the 90 days horizon Gamco Global Telecommunications is expected to generate 6.14 times more return on investment than The Arbitrage. However, Gamco Global is 6.14 times more volatile than The Arbitrage Event Driven. It trades about 0.23 of its potential returns per unit of risk. The Arbitrage Event Driven is currently generating about 0.43 per unit of risk. If you would invest  2,242  in Gamco Global Telecommunications on May 6, 2025 and sell it today you would earn a total of  226.00  from holding Gamco Global Telecommunications or generate 10.08% return on investment over 90 days.

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

Gamco Global Telecommunication  vs.  The Arbitrage Event Driven

Gamco Global Telecom

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global Telecommunications are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gamco Global may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Arbitrage Event

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in The Arbitrage Event Driven are ranked lower than 33 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, The Arbitrage 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 Global and The Arbitrage

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

The idea behind Gamco Global Telecommunications and The Arbitrage Event Driven 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.