Correlation Between Gold Portfolio and Gabelli Gold

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

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

Diversification Opportunities for Gold Portfolio and Gabelli Gold

0.99

Correlation Coefficient

Gold Portfolio  Gabelli Gold

No risk reduction

The 3 months correlation between Gold and Gabelli is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Gold Portfolio Gold and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold and Gold Portfolio 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 Gold Portfolio Gold 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 Gold Portfolio i.e., Gold Portfolio and Gabelli Gold go up and down completely randomly.

Pair Corralation between Gold Portfolio and Gabelli Gold

Assuming the 90 days horizon Gold Portfolio is expected to generate 1.25 times less return on investment than Gabelli Gold. In addition to that, Gold Portfolio is 1.06 times more volatile than Gabelli Gold Fund. It trades about 0.03 of its total potential returns per unit of risk. Gabelli Gold Fund is currently generating about 0.05 per unit of volatility. If you would invest  1,640  in Gabelli Gold Fund on October 4, 2024 and sell it today you would earn a total of  380.00  from holding Gabelli Gold Fund or generate 23.17% return on investment over 90 days.

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

Gold Portfolio Gold  vs.  Gabelli Gold Fund

Gold Portfolio Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Portfolio Gold has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Gabelli Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Gold Portfolio and Gabelli Gold

The main advantage of trading using opposite Gold Portfolio and Gabelli Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Portfolio 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 Gold Portfolio Gold 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.