Correlation Between Agriculture Natural and Gabelli MultiMedia

Can any of the company-specific risk be diversified away by investing in both Agriculture Natural and Gabelli MultiMedia 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 Agriculture Natural and Gabelli MultiMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Agriculture Natural Solutions and Gabelli MultiMedia Mutual, you can compare the effects of market volatilities on Agriculture Natural and Gabelli MultiMedia 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 Agriculture Natural with a short position of Gabelli MultiMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agriculture Natural and Gabelli MultiMedia.

Diversification Opportunities for Agriculture Natural and Gabelli MultiMedia

0.53

Correlation Coefficient

Agriculture Natural  Gabelli MultiMedia

Very weak diversification

The 3 months correlation between Agriculture and Gabelli is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Agriculture Natural Solutions and Gabelli MultiMedia Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli MultiMedia Mutual and Agriculture 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 Agriculture Natural Solutions are associated (or correlated) with Gabelli MultiMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli MultiMedia Mutual has no effect on the direction of Agriculture Natural i.e., Agriculture Natural and Gabelli MultiMedia go up and down completely randomly.

Pair Corralation between Agriculture Natural and Gabelli MultiMedia

Assuming the 90 days horizon Agriculture Natural Solutions is expected to generate 9.66 times more return on investment than Gabelli MultiMedia. However, Agriculture Natural is 9.66 times more volatile than Gabelli MultiMedia Mutual. It trades about 0.15 of its potential returns per unit of risk. Gabelli MultiMedia Mutual is currently generating about 0.17 per unit of risk. If you would invest  33.00  in Agriculture Natural Solutions on November 20, 2024 and sell it today you would earn a total of  5.00  from holding Agriculture Natural Solutions or generate 15.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	90.0%
Values	Daily Returns

Agriculture Natural Solutions  vs.  Gabelli MultiMedia Mutual

Agriculture Natural

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Agriculture Natural Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Agriculture Natural showed solid returns over the last few months and may actually be approaching a breakup point.

Gabelli MultiMedia Mutual

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli MultiMedia Mutual are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Gabelli MultiMedia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Agriculture Natural and Gabelli MultiMedia

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

The idea behind Agriculture Natural Solutions and Gabelli MultiMedia Mutual 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.