Correlation Between Gabelli Equity and Blackrock Floating

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

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

Diversification Opportunities for Gabelli Equity and Blackrock Floating

-0.18

Correlation Coefficient

Gabelli Equity  Blackrock Floating

Good diversification

The 3 months correlation between Gabelli and Blackrock is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Blackrock Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Floating Rate and Gabelli Equity 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 The Gabelli Equity are associated (or correlated) with Blackrock Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Floating Rate has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Blackrock Floating go up and down completely randomly.

Pair Corralation between Gabelli Equity and Blackrock Floating

Assuming the 90 days trading horizon The Gabelli Equity is expected to generate 0.79 times more return on investment than Blackrock Floating. However, The Gabelli Equity is 1.26 times less risky than Blackrock Floating. It trades about 0.04 of its potential returns per unit of risk. Blackrock Floating Rate is currently generating about -0.13 per unit of risk. If you would invest  2,095  in The Gabelli Equity on December 30, 2024 and sell it today you would earn a total of  23.00  from holding The Gabelli Equity or generate 1.1% return on investment over 90 days.

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

The Gabelli Equity  vs.  Blackrock Floating Rate

Gabelli Equity

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Equity are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental drivers, Gabelli Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Blackrock Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackrock Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Blackrock Floating is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Equity and Blackrock Floating

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

The idea behind The Gabelli Equity and Blackrock Floating Rate 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.