Correlation Between Gabelli Equity and BlackRock Health

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

By analyzing existing cross correlation between Gabelli Equity Trust and BlackRock Health Sciences, you can compare the effects of market volatilities on Gabelli Equity and BlackRock Health 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 Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and BlackRock Health.

Diversification Opportunities for Gabelli Equity and BlackRock Health

0.11

Correlation Coefficient

Gabelli Equity  BlackRock Health

Average diversification

The 3 months correlation between Gabelli and BlackRock is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and BlackRock Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Health Sciences 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 Gabelli Equity Trust are associated (or correlated) with BlackRock Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Health Sciences has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and BlackRock Health go up and down completely randomly.

Pair Corralation between Gabelli Equity and BlackRock Health

Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 1.09 times more return on investment than BlackRock Health. However, Gabelli Equity is 1.09 times more volatile than BlackRock Health Sciences. It trades about 0.16 of its potential returns per unit of risk. BlackRock Health Sciences is currently generating about 0.04 per unit of risk. If you would invest  535.00  in Gabelli Equity Trust on September 2, 2024 and sell it today you would earn a total of  44.00  from holding Gabelli Equity Trust or generate 8.22% return on investment over 90 days.

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

Gabelli Equity Trust  vs.  BlackRock Health Sciences

Gabelli Equity Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Equity Trust are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat uncertain basic indicators, Gabelli Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BlackRock Health Sciences

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Health Sciences are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, BlackRock Health is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Equity and BlackRock Health

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

The idea behind Gabelli Equity Trust and BlackRock Health Sciences 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.