Correlation Between Gabelli Equity and IHIT

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

Diversification Opportunities for Gabelli Equity and IHIT

-0.2

Correlation Coefficient

Gabelli Equity  IHIT

Good diversification

The 3 months correlation between Gabelli and IHIT is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and IHIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHIT 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 IHIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHIT has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and IHIT go up and down completely randomly.

Pair Corralation between Gabelli Equity and IHIT

If you would invest  535.00  in Gabelli Equity Trust on August 31, 2024 and sell it today you would earn a total of  42.00  from holding Gabelli Equity Trust or generate 7.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Gabelli Equity Trust  vs.  IHIT

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 December 2024.

IHIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IHIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, IHIT 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 IHIT

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

The idea behind Gabelli Equity Trust and IHIT 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.