Correlation Between Gabelli Equity and Monteagle Select

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

Diversification Opportunities for Gabelli Equity and Monteagle Select

0.21

Correlation Coefficient

Gabelli Equity  Monteagle Select

Modest diversification

The 3 months correlation between Gabelli and Monteagle is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and Monteagle Select Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monteagle Select Value 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 Monteagle Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monteagle Select Value has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Monteagle Select go up and down completely randomly.

Pair Corralation between Gabelli Equity and Monteagle Select

Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 0.74 times more return on investment than Monteagle Select. However, Gabelli Equity Trust is 1.36 times less risky than Monteagle Select. It trades about 0.08 of its potential returns per unit of risk. Monteagle Select Value is currently generating about -0.09 per unit of risk. If you would invest  528.00  in Gabelli Equity Trust on December 21, 2024 and sell it today you would earn a total of  21.00  from holding Gabelli Equity Trust or generate 3.98% return on investment over 90 days.

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

Gabelli Equity Trust  vs.  Monteagle Select Value

Gabelli Equity Trust

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Equity Trust are ranked lower than 6 (%) 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.

Monteagle Select Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Monteagle Select Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Gabelli Equity and Monteagle Select

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

The idea behind Gabelli Equity Trust and Monteagle Select Value 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.