Correlation Between Rbc Emerging and Gamco Global

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

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

Diversification Opportunities for Rbc Emerging and Gamco Global

0.04

Correlation Coefficient

Rbc Emerging  Gamco Global

Significant diversification

The 3 months correlation between Rbc and Gamco is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Rbc Emerging Markets and Gamco Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Opportunity and Rbc Emerging 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 Rbc Emerging Markets 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 Opportunity has no effect on the direction of Rbc Emerging i.e., Rbc Emerging and Gamco Global go up and down completely randomly.

Pair Corralation between Rbc Emerging and Gamco Global

Assuming the 90 days horizon Rbc Emerging Markets is expected to under-perform the Gamco Global. In addition to that, Rbc Emerging is 1.31 times more volatile than Gamco Global Opportunity. It trades about -0.22 of its total potential returns per unit of risk. Gamco Global Opportunity is currently generating about -0.14 per unit of volatility. If you would invest  1,243  in Gamco Global Opportunity on August 12, 2024 and sell it today you would lose (31.00) from holding Gamco Global Opportunity or give up 2.49% of portfolio value over 90 days.

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

Rbc Emerging Markets  vs.  Gamco Global Opportunity

Rbc Emerging Markets

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rbc Emerging Markets are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Rbc Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gamco Global Opportunity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gamco Global Opportunity has generated negative risk-adjusted returns adding no value to fund investors. 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 Rbc Emerging and Gamco Global

The main advantage of trading using opposite Rbc Emerging and Gamco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbc Emerging 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 Rbc Emerging Markets and Gamco Global Opportunity 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 Anywhere module to track or share privately all of your investments from the convenience of any device.