Correlation Between GAMCO Global and Chemours

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

Diversification Opportunities for GAMCO Global and Chemours

0.13

Correlation Coefficient

GAMCO Global  Chemours

Average diversification

The 3 months correlation between GAMCO and Chemours is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding GAMCO Global Gold and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of GAMCO Global i.e., GAMCO Global and Chemours go up and down completely randomly.

Pair Corralation between GAMCO Global and Chemours

Assuming the 90 days trading horizon GAMCO Global Gold is expected to under-perform the Chemours. But the preferred stock apears to be less risky and, when comparing its historical volatility, GAMCO Global Gold is 3.61 times less risky than Chemours. The preferred stock trades about -0.25 of its potential returns per unit of risk. The Chemours Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,863  in Chemours Co on August 20, 2024 and sell it today you would earn a total of  26.00  from holding Chemours Co or generate 1.4% return on investment over 90 days.

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

GAMCO Global Gold  vs.  Chemours Co

GAMCO Global Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GAMCO Global Gold are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Chemours

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chemours Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile fundamental indicators, Chemours may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with GAMCO Global and Chemours

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

The idea behind GAMCO Global Gold and Chemours Co 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.