Correlation Between Gabelli Equity and Nicholas

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

Diversification Opportunities for Gabelli Equity and Nicholas

0.9

Correlation Coefficient

Gabelli Equity  Nicholas

Almost no diversification

The 3 months correlation between Gabelli and Nicholas is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and Nicholas Ii Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nicholas Ii 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 Nicholas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nicholas Ii has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Nicholas go up and down completely randomly.

Pair Corralation between Gabelli Equity and Nicholas

Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 0.71 times more return on investment than Nicholas. However, Gabelli Equity Trust is 1.4 times less risky than Nicholas. It trades about 0.51 of its potential returns per unit of risk. Nicholas Ii Inc is currently generating about 0.29 per unit of risk. If you would invest  536.00  in Gabelli Equity Trust on September 5, 2024 and sell it today you would earn a total of  46.00  from holding Gabelli Equity Trust or generate 8.58% return on investment over 90 days.

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

Gabelli Equity Trust  vs.  Nicholas Ii Inc

Gabelli Equity Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Equity Trust are ranked lower than 11 (%) 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.

Nicholas Ii

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nicholas Ii Inc are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nicholas may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gabelli Equity and Nicholas

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

The idea behind Gabelli Equity Trust and Nicholas Ii Inc 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.