Correlation Between Gabelli Equity and Schwartz Value

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

Diversification Opportunities for Gabelli Equity and Schwartz Value

0.46

Correlation Coefficient

Gabelli Equity  Schwartz Value

Very weak diversification

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

Pair Corralation between Gabelli Equity and Schwartz Value

Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 0.4 times more return on investment than Schwartz Value. However, Gabelli Equity Trust is 2.49 times less risky than Schwartz Value. It trades about -0.03 of its potential returns per unit of risk. Schwartz Value Focused is currently generating about -0.15 per unit of risk. If you would invest  564.00  in Gabelli Equity Trust on November 29, 2024 and sell it today you would lose (11.00) from holding Gabelli Equity Trust or give up 1.95% of portfolio value over 90 days.

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

Gabelli Equity Trust  vs.  Schwartz Value Focused

Gabelli Equity Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gabelli Equity Trust has generated negative risk-adjusted returns adding no value to fund investors. 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.

Schwartz Value Focused

Risk-Adjusted Performance

Very Weak

Over the last 90 days Schwartz Value Focused has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Gabelli Equity and Schwartz Value

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

The idea behind Gabelli Equity Trust and Schwartz Value Focused 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.