Correlation Between Liberty All and Gabelli Dividend

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

By analyzing existing cross correlation between Liberty All Star and Gabelli Dividend Income, you can compare the effects of market volatilities on Liberty All and Gabelli Dividend 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 Liberty All with a short position of Gabelli Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty All and Gabelli Dividend.

Diversification Opportunities for Liberty All and Gabelli Dividend

0.9

Correlation Coefficient

Liberty All  Gabelli Dividend

Almost no diversification

The 3 months correlation between Liberty and Gabelli is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Liberty All Star and Gabelli Dividend Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend Income and Liberty All 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 Liberty All Star are associated (or correlated) with Gabelli Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend Income has no effect on the direction of Liberty All i.e., Liberty All and Gabelli Dividend go up and down completely randomly.

Pair Corralation between Liberty All and Gabelli Dividend

Considering the 90-day investment horizon Liberty All Star is expected to generate 1.34 times more return on investment than Gabelli Dividend. However, Liberty All is 1.34 times more volatile than Gabelli Dividend Income. It trades about 0.09 of its potential returns per unit of risk. Gabelli Dividend Income is currently generating about 0.09 per unit of risk. If you would invest  506.00  in Liberty All Star on September 24, 2024 and sell it today you would earn a total of  64.00  from holding Liberty All Star or generate 12.65% return on investment over 90 days.

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

Liberty All Star  vs.  Gabelli Dividend Income

Liberty All Star

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Liberty All Star are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Liberty All is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Gabelli Dividend Income

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Dividend Income are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable fundamental indicators, Gabelli Dividend is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Liberty All and Gabelli Dividend

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

The idea behind Liberty All Star and Gabelli Dividend Income 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 CEOs Directory module to screen CEOs from public companies around the world.