Correlation Between Gabelli Global and Catalystmillburn

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

By analyzing existing cross correlation between Gabelli Global Financial and Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Gabelli Global and Catalystmillburn 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 Global with a short position of Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and Catalystmillburn.

Diversification Opportunities for Gabelli Global and Catalystmillburn

0.94

Correlation Coefficient

Gabelli Global  Catalystmillburn

Almost no diversification

The 3 months correlation between Gabelli and Catalystmillburn is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Financial and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge and Gabelli Global 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 Global Financial are associated (or correlated) with Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Gabelli Global i.e., Gabelli Global and Catalystmillburn go up and down completely randomly.

Pair Corralation between Gabelli Global and Catalystmillburn

Assuming the 90 days horizon Gabelli Global Financial is expected to generate 1.37 times more return on investment than Catalystmillburn. However, Gabelli Global is 1.37 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.09 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.03 per unit of risk. If you would invest  1,020  in Gabelli Global Financial on September 24, 2024 and sell it today you would earn a total of  538.00  from holding Gabelli Global Financial or generate 52.75% return on investment over 90 days.

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

Gabelli Global Financial  vs.  Catalystmillburn Hedge Strateg

Gabelli Global Financial

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Financial are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gabelli Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Catalystmillburn Hedge

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Catalystmillburn Hedge Strategy are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Catalystmillburn is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Global and Catalystmillburn

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

The idea behind Gabelli Global Financial and Catalystmillburn Hedge Strategy 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.