Correlation Between Gabelli Equity and Nuveen New

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

Diversification Opportunities for Gabelli Equity and Nuveen New

0.02

Correlation Coefficient

Gabelli Equity  Nuveen New

Significant diversification

The 3 months correlation between Gabelli and Nuveen is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Nuveen New go up and down completely randomly.

Pair Corralation between Gabelli Equity and Nuveen New

Assuming the 90 days trading horizon The Gabelli Equity is expected to under-perform the Nuveen New. In addition to that, Gabelli Equity is 1.34 times more volatile than Nuveen New York. It trades about -0.13 of its total potential returns per unit of risk. Nuveen New York is currently generating about 0.1 per unit of volatility. If you would invest  1,140  in Nuveen New York on November 29, 2024 and sell it today you would earn a total of  39.00  from holding Nuveen New York or generate 3.42% return on investment over 90 days.

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

The Gabelli Equity  vs.  Nuveen New York

Gabelli Equity

Risk-Adjusted Performance

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 New York

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen New York are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Nuveen New is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Equity and Nuveen New

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

The idea behind The Gabelli Equity and Nuveen New York 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.