Correlation Between Allianzgi Emerging and Gabelli Gold

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

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

Diversification Opportunities for Allianzgi Emerging and Gabelli Gold

0.59

Correlation Coefficient

Allianzgi Emerging  Gabelli Gold

Very weak diversification

The 3 months correlation between Allianzgi and Gabelli is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Emerging Markets and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold and Allianzgi 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 Allianzgi Emerging Markets are associated (or correlated) with Gabelli Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Gold has no effect on the direction of Allianzgi Emerging i.e., Allianzgi Emerging and Gabelli Gold go up and down completely randomly.

Pair Corralation between Allianzgi Emerging and Gabelli Gold

Assuming the 90 days horizon Allianzgi Emerging is expected to generate 25.9 times less return on investment than Gabelli Gold. But when comparing it to its historical volatility, Allianzgi Emerging Markets is 1.93 times less risky than Gabelli Gold. It trades about 0.02 of its potential returns per unit of risk. Gabelli Gold Fund is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  2,040  in Gabelli Gold Fund on October 23, 2024 and sell it today you would earn a total of  134.00  from holding Gabelli Gold Fund or generate 6.57% return on investment over 90 days.

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

Allianzgi Emerging Markets  vs.  Gabelli Gold Fund

Allianzgi Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Allianzgi Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Allianzgi Emerging and Gabelli Gold

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

The idea behind Allianzgi Emerging Markets and Gabelli Gold Fund 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.