Correlation Between The Gabelli and Voya Multi-manager

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

By analyzing existing cross correlation between The Gabelli Small and Voya Multi Manager Mid, you can compare the effects of market volatilities on The Gabelli and Voya Multi-manager 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 Voya Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gabelli and Voya Multi-manager.

Diversification Opportunities for The Gabelli and Voya Multi-manager

0.91

Correlation Coefficient

The Gabelli  Voya Multi-manager

Almost no diversification

The 3 months correlation between The and Voya is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Small and Voya Multi Manager Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Multi Manager 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 Small are associated (or correlated) with Voya Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Multi Manager has no effect on the direction of The Gabelli i.e., The Gabelli and Voya Multi-manager go up and down completely randomly.

Pair Corralation between The Gabelli and Voya Multi-manager

Assuming the 90 days horizon The Gabelli Small is expected to under-perform the Voya Multi-manager. In addition to that, The Gabelli is 1.26 times more volatile than Voya Multi Manager Mid. It trades about -0.04 of its total potential returns per unit of risk. Voya Multi Manager Mid is currently generating about -0.02 per unit of volatility. If you would invest  943.00  in Voya Multi Manager Mid on December 28, 2024 and sell it today you would lose (9.00) from holding Voya Multi Manager Mid or give up 0.95% of portfolio value over 90 days.

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

The Gabelli Small  vs.  Voya Multi Manager Mid

Gabelli Small

Risk-Adjusted Performance

Very Weak

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

Voya Multi Manager

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Multi Manager Mid has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Voya Multi-manager is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with The Gabelli and Voya Multi-manager

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

The idea behind The Gabelli Small and Voya Multi Manager Mid 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.