Correlation Between Gabelli Equity and Marshfield Centrated

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

Diversification Opportunities for Gabelli Equity and Marshfield Centrated

0.7
  Correlation Coefficient

Poor diversification

The 3 months correlation between Gabelli and Marshfield is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and Marshfield Centrated Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marshfield Centrated 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 Marshfield Centrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marshfield Centrated has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Marshfield Centrated go up and down completely randomly.

Pair Corralation between Gabelli Equity and Marshfield Centrated

Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 1.33 times more return on investment than Marshfield Centrated. However, Gabelli Equity is 1.33 times more volatile than Marshfield Centrated Opportunity. It trades about 0.05 of its potential returns per unit of risk. Marshfield Centrated Opportunity is currently generating about 0.01 per unit of risk. If you would invest  512.00  in Gabelli Equity Trust on October 10, 2024 and sell it today you would earn a total of  25.00  from holding Gabelli Equity Trust or generate 4.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Gabelli Equity Trust  vs.  Marshfield Centrated Opportuni

 Performance 
       Timeline  
Gabelli Equity Trust 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Equity Trust are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Gabelli Equity is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
Marshfield Centrated 

Risk-Adjusted Performance

0 of 100

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

Gabelli Equity and Marshfield Centrated Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gabelli Equity and Marshfield Centrated

The main advantage of trading using opposite Gabelli Equity and Marshfield Centrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, Marshfield Centrated 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 Marshfield Centrated will offset losses from the drop in Marshfield Centrated's long position.
The idea behind Gabelli Equity Trust and Marshfield Centrated Opportunity 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 CEOs Directory module to screen CEOs from public companies around the world.

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