Correlation Between The Gabelli and Gabelli Equity

Can any of the company-specific risk be diversified away by investing in both The Gabelli and Gabelli Equity 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 The Gabelli and Gabelli Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Gabelli Asset and Gabelli Equity Income, you can compare the effects of market volatilities on The Gabelli and Gabelli Equity 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 The Gabelli with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gabelli and Gabelli Equity.

Diversification Opportunities for The Gabelli and Gabelli Equity

0.99

Correlation Coefficient

The Gabelli  Gabelli Equity

No risk reduction

The 3 months correlation between The and Gabelli is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Asset and Gabelli Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity Income and The Gabelli 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 The Gabelli Asset are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity Income has no effect on the direction of The Gabelli i.e., The Gabelli and Gabelli Equity go up and down completely randomly.

Pair Corralation between The Gabelli and Gabelli Equity

Assuming the 90 days horizon The Gabelli Asset is expected to generate 0.95 times more return on investment than Gabelli Equity. However, The Gabelli Asset is 1.05 times less risky than Gabelli Equity. It trades about 0.17 of its potential returns per unit of risk. Gabelli Equity Income is currently generating about 0.15 per unit of risk. If you would invest  5,165  in The Gabelli Asset on September 5, 2024 and sell it today you would earn a total of  395.00  from holding The Gabelli Asset or generate 7.65% return on investment over 90 days.

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

The Gabelli Asset  vs.  Gabelli Equity Income

Gabelli Asset

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Asset are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, The Gabelli may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gabelli Equity Income

Risk-Adjusted Performance

11 of 100

Good

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

Pair Trading with The Gabelli and Gabelli Equity

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

The idea behind The Gabelli Asset and Gabelli Equity Income 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.