Correlation Between The Gabelli and Gabelli Esg

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

Diversification Opportunities for The Gabelli and Gabelli Esg

0.66

Correlation Coefficient

The Gabelli  Gabelli Esg

Poor diversification

The 3 months correlation between The and Gabelli is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Small and Gabelli Esg Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Esg Fund 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 Gabelli Esg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Esg Fund has no effect on the direction of The Gabelli i.e., The Gabelli and Gabelli Esg go up and down completely randomly.

Pair Corralation between The Gabelli and Gabelli Esg

Assuming the 90 days horizon The Gabelli Small is expected to under-perform the Gabelli Esg. In addition to that, The Gabelli is 1.3 times more volatile than Gabelli Esg Fund. It trades about -0.17 of its total potential returns per unit of risk. Gabelli Esg Fund is currently generating about -0.02 per unit of volatility. If you would invest  1,319  in Gabelli Esg Fund on December 4, 2024 and sell it today you would lose (14.00) from holding Gabelli Esg Fund or give up 1.06% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

The Gabelli Small  vs.  Gabelli Esg Fund

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 latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Gabelli Esg Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gabelli Esg Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Gabelli Esg 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 Gabelli Esg

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

The idea behind The Gabelli Small and Gabelli Esg Fund 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 Transaction History module to view history of all your transactions and understand their impact on performance.