Correlation Between Bitcoin and The Gabelli

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

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

Diversification Opportunities for Bitcoin and The Gabelli

-0.27

Correlation Coefficient

Bitcoin  The Gabelli

Very good diversification

The 3 months correlation between Bitcoin and The is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and The Gabelli Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global and Bitcoin 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 Bitcoin are associated (or correlated) with The Gabelli. 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 has no effect on the direction of Bitcoin i.e., Bitcoin and The Gabelli go up and down completely randomly.

Pair Corralation between Bitcoin and The Gabelli

Assuming the 90 days trading horizon Bitcoin is expected to generate 3.22 times more return on investment than The Gabelli. However, Bitcoin is 3.22 times more volatile than The Gabelli Global. It trades about 0.1 of its potential returns per unit of risk. The Gabelli Global is currently generating about 0.12 per unit of risk. If you would invest  9,935,606  in Bitcoin on October 25, 2024 and sell it today you would earn a total of  424,294  from holding Bitcoin or generate 4.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	85.71%
Values	Daily Returns

Bitcoin  vs.  The Gabelli Global

Bitcoin

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Gabelli Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Bitcoin and The Gabelli

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

The idea behind Bitcoin and The Gabelli Global 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.