Correlation Between BlackRock Capital and Gabelli Dividend

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

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

Diversification Opportunities for BlackRock Capital and Gabelli Dividend

0.79

Correlation Coefficient

BlackRock Capital  Gabelli Dividend

Poor diversification

The 3 months correlation between BlackRock and Gabelli is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation 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 BlackRock Capital 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 BlackRock Capital Allocation 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 BlackRock Capital i.e., BlackRock Capital and Gabelli Dividend go up and down completely randomly.

Pair Corralation between BlackRock Capital and Gabelli Dividend

Given the investment horizon of 90 days BlackRock Capital Allocation is expected to generate 1.06 times more return on investment than Gabelli Dividend. However, BlackRock Capital is 1.06 times more volatile than Gabelli Dividend Income. It trades about 0.08 of its potential returns per unit of risk. Gabelli Dividend Income is currently generating about 0.08 per unit of risk. If you would invest  1,219  in BlackRock Capital Allocation on October 12, 2024 and sell it today you would earn a total of  329.00  from holding BlackRock Capital Allocation or generate 26.99% return on investment over 90 days.

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

BlackRock Capital Allocation  vs.  Gabelli Dividend Income

BlackRock Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Capital Allocation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BlackRock Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Gabelli Dividend Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Dividend Income has generated negative risk-adjusted returns adding no value to fund investors. 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 BlackRock Capital and Gabelli Dividend

The main advantage of trading using opposite BlackRock Capital and Gabelli Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Capital 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 BlackRock Capital Allocation 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.