Correlation Between The Gabelli and Sitka Gold

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

By analyzing existing cross correlation between The Gabelli Growth and Sitka Gold Corp, you can compare the effects of market volatilities on The Gabelli and Sitka Gold 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 Sitka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gabelli and Sitka Gold.

Diversification Opportunities for The Gabelli and Sitka Gold

0.33

Correlation Coefficient

The Gabelli  Sitka Gold

Weak diversification

The 3 months correlation between The and Sitka is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Growth and Sitka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitka Gold Corp 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 Growth are associated (or correlated) with Sitka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitka Gold Corp has no effect on the direction of The Gabelli i.e., The Gabelli and Sitka Gold go up and down completely randomly.

Pair Corralation between The Gabelli and Sitka Gold

Assuming the 90 days horizon The Gabelli Growth is expected to under-perform the Sitka Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Gabelli Growth is 3.07 times less risky than Sitka Gold. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Sitka Gold Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Sitka Gold Corp on December 2, 2024 and sell it today you would lose (3.00) from holding Sitka Gold Corp or give up 10.0% of portfolio value over 90 days.

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

The Gabelli Growth  vs.  Sitka Gold Corp

Gabelli Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, The Gabelli is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sitka Gold Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sitka Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking signals, Sitka Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with The Gabelli and Sitka Gold

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

The idea behind The Gabelli Growth and Sitka Gold Corp 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..