Correlation Between Gabelli Equity and James Alpha

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

Diversification Opportunities for Gabelli Equity and James Alpha

-0.46

Correlation Coefficient

Gabelli Equity  James Alpha

Very good diversification

The 3 months correlation between Gabelli and James is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and James Alpha Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on James Alpha Global 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 James Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of James Alpha Global has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and James Alpha go up and down completely randomly.

Pair Corralation between Gabelli Equity and James Alpha

Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 1.09 times more return on investment than James Alpha. However, Gabelli Equity is 1.09 times more volatile than James Alpha Global. It trades about 0.16 of its potential returns per unit of risk. James Alpha Global is currently generating about -0.03 per unit of risk. If you would invest  535.00  in Gabelli Equity Trust on September 3, 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 Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Gabelli Equity Trust  vs.  James Alpha Global

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.

James Alpha Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days James Alpha Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, James Alpha is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Equity and James Alpha

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

The idea behind Gabelli Equity Trust and James Alpha Global 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.