Correlation Between Gabelli Equity and Rivernorth Opportunistic

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

Diversification Opportunities for Gabelli Equity and Rivernorth Opportunistic

0.84

Correlation Coefficient

Gabelli Equity  Rivernorth Opportunistic

Very poor diversification

The 3 months correlation between Gabelli and Rivernorth is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Rivernorth Opportunistic Munic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivernorth Opportunistic 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 Rivernorth Opportunistic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivernorth Opportunistic has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Rivernorth Opportunistic go up and down completely randomly.

Pair Corralation between Gabelli Equity and Rivernorth Opportunistic

Assuming the 90 days trading horizon The Gabelli Equity is expected to under-perform the Rivernorth Opportunistic. In addition to that, Gabelli Equity is 1.65 times more volatile than Rivernorth Opportunistic Municipalome. It trades about -0.35 of its total potential returns per unit of risk. Rivernorth Opportunistic Municipalome is currently generating about -0.42 per unit of volatility. If you would invest  1,572  in Rivernorth Opportunistic Municipalome on September 26, 2024 and sell it today you would lose (83.00) from holding Rivernorth Opportunistic Municipalome or give up 5.28% of portfolio value over 90 days.

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

The Gabelli Equity  vs.  Rivernorth Opportunistic Munic

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 fragile 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.

Rivernorth Opportunistic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rivernorth Opportunistic Municipalome has generated negative risk-adjusted returns adding no value to fund investors. Despite latest inconsistent performance, the Fund's primary indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the fund traders.

Pair Trading with Gabelli Equity and Rivernorth Opportunistic

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

The idea behind The Gabelli Equity and Rivernorth Opportunistic Municipalome 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.