Correlation Between Amg River and Gabelli Global

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

By analyzing existing cross correlation between Amg River Road and Gabelli Global Mini, you can compare the effects of market volatilities on Amg River and Gabelli 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 Amg River with a short position of Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg River and Gabelli Global.

Diversification Opportunities for Amg River and Gabelli Global

0.07

Correlation Coefficient

Amg River  Gabelli Global

Significant diversification

The 3 months correlation between Amg and Gabelli is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Amg River Road and Gabelli Global Mini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Mini and Amg River 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 Amg River Road are associated (or correlated) with Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Mini has no effect on the direction of Amg River i.e., Amg River and Gabelli Global go up and down completely randomly.

Pair Corralation between Amg River and Gabelli Global

Assuming the 90 days horizon Amg River Road is expected to generate 0.52 times more return on investment than Gabelli Global. However, Amg River Road is 1.94 times less risky than Gabelli Global. It trades about -0.04 of its potential returns per unit of risk. Gabelli Global Mini is currently generating about -0.13 per unit of risk. If you would invest  958.00  in Amg River Road on December 20, 2024 and sell it today you would lose (18.00) from holding Amg River Road or give up 1.88% of portfolio value over 90 days.

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

Amg River Road  vs.  Gabelli Global Mini

Amg River Road

Risk-Adjusted Performance

Very Weak

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

Gabelli Global Mini

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gabelli Global Mini has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's primary 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 Amg River and Gabelli Global

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

The idea behind Amg River Road and Gabelli Global Mini 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 Commodity Directory module to find actively traded commodities issued by global exchanges.