Correlation Between Gabelli Equity and Maingate Mlp

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

Diversification Opportunities for Gabelli Equity and Maingate Mlp

0.88

Correlation Coefficient

Gabelli Equity  Maingate Mlp

Very poor diversification

The 3 months correlation between Gabelli and Maingate is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and Maingate Mlp Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maingate Mlp 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 Maingate Mlp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maingate Mlp has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Maingate Mlp go up and down completely randomly.

Pair Corralation between Gabelli Equity and Maingate Mlp

Considering the 90-day investment horizon Gabelli Equity is expected to generate 1.36 times less return on investment than Maingate Mlp. But when comparing it to its historical volatility, Gabelli Equity Trust is 1.23 times less risky than Maingate Mlp. It trades about 0.14 of its potential returns per unit of risk. Maingate Mlp Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  808.00  in Maingate Mlp Fund on September 17, 2024 and sell it today you would earn a total of  74.00  from holding Maingate Mlp Fund or generate 9.16% return on investment over 90 days.

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

Gabelli Equity Trust  vs.  Maingate Mlp Fund

Gabelli Equity Trust

Risk-Adjusted Performance

10 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Equity Trust are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, Gabelli Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Maingate Mlp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maingate Mlp Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Maingate Mlp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gabelli Equity and Maingate Mlp

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

The idea behind Gabelli Equity Trust and Maingate Mlp Fund 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.