Correlation Between Cullen Enhanced and Gabelli Gold

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

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

Diversification Opportunities for Cullen Enhanced and Gabelli Gold

0.04

Correlation Coefficient

Cullen Enhanced  Gabelli Gold

Significant diversification

The 3 months correlation between Cullen and Gabelli is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Cullen Enhanced Equity and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold and Cullen Enhanced 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 Cullen Enhanced Equity 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 Cullen Enhanced i.e., Cullen Enhanced and Gabelli Gold go up and down completely randomly.

Pair Corralation between Cullen Enhanced and Gabelli Gold

Assuming the 90 days horizon Cullen Enhanced Equity is expected to generate 0.32 times more return on investment than Gabelli Gold. However, Cullen Enhanced Equity is 3.14 times less risky than Gabelli Gold. It trades about 0.05 of its potential returns per unit of risk. Gabelli Gold Fund is currently generating about 0.01 per unit of risk. If you would invest  1,057  in Cullen Enhanced Equity on September 12, 2024 and sell it today you would earn a total of  16.00  from holding Cullen Enhanced Equity or generate 1.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Cullen Enhanced Equity  vs.  Gabelli Gold Fund

Cullen Enhanced Equity

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cullen Enhanced Equity are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Cullen Enhanced 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

Insignificant

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

Pair Trading with Cullen Enhanced and Gabelli Gold

The main advantage of trading using opposite Cullen Enhanced and Gabelli Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cullen Enhanced 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 Cullen Enhanced Equity 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.

Check out your portfolio center.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.