Correlation Between Gabelli Equity and Nuveen Preferred

Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and Nuveen Preferred 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 Nuveen Preferred 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 Nuveen Preferred And, you can compare the effects of market volatilities on Gabelli Equity and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and Nuveen Preferred.

Diversification Opportunities for Gabelli Equity and Nuveen Preferred

-0.47

Correlation Coefficient

Gabelli Equity  Nuveen Preferred

Very good diversification

The 3 months correlation between Gabelli and Nuveen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Nuveen Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred And 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 Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred And has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Nuveen Preferred go up and down completely randomly.

Pair Corralation between Gabelli Equity and Nuveen Preferred

If you would invest  1,611  in Nuveen Preferred And on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Nuveen Preferred And or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

The Gabelli Equity  vs.  Nuveen Preferred And

Gabelli Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's fundamental drivers remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Nuveen Preferred And

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gabelli Equity and Nuveen Preferred

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

The idea behind The Gabelli Equity and Nuveen Preferred And 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.