Correlation Between Gamco Natural and Income Fund

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

Diversification Opportunities for Gamco Natural and Income Fund

0.65

Correlation Coefficient

Gamco Natural  Income Fund

Poor diversification

The 3 months correlation between Gamco and Income is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Income Fund Of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Income Fund 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 Income Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Income Fund has no effect on the direction of Gamco Natural i.e., Gamco Natural and Income Fund go up and down completely randomly.

Pair Corralation between Gamco Natural and Income Fund

Assuming the 90 days horizon Gamco Natural Resources is expected to generate 1.3 times more return on investment than Income Fund. However, Gamco Natural is 1.3 times more volatile than Income Fund Of. It trades about 0.13 of its potential returns per unit of risk. Income Fund Of is currently generating about -0.19 per unit of risk. If you would invest  619.00  in Gamco Natural Resources on February 1, 2024 and sell it today you would earn a total of  12.00  from holding Gamco Natural Resources or generate 1.94% 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.  Income Fund Of

Gamco Natural Resources

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Natural Resources are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gamco Natural may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Income Fund

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Income Fund Of are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Income Fund 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 Income Fund

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

The idea behind Gamco Natural Resources and Income Fund Of 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.