Correlation Between Gabelli Dividend and Virtus AllianzGI

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

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

Diversification Opportunities for Gabelli Dividend and Virtus AllianzGI

0.52

Correlation Coefficient

Gabelli Dividend  Virtus AllianzGI

Very weak diversification

The 3 months correlation between Gabelli and Virtus is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Dividend and Virtus AllianzGI Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus AllianzGI Con and Gabelli Dividend 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 Dividend are associated (or correlated) with Virtus AllianzGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus AllianzGI Con has no effect on the direction of Gabelli Dividend i.e., Gabelli Dividend and Virtus AllianzGI go up and down completely randomly.

Pair Corralation between Gabelli Dividend and Virtus AllianzGI

Assuming the 90 days trading horizon The Gabelli Dividend is expected to generate 0.7 times more return on investment than Virtus AllianzGI. However, The Gabelli Dividend is 1.43 times less risky than Virtus AllianzGI. It trades about 0.05 of its potential returns per unit of risk. Virtus AllianzGI Convertible is currently generating about -0.08 per unit of risk. If you would invest  2,431  in The Gabelli Dividend on September 13, 2024 and sell it today you would earn a total of  28.00  from holding The Gabelli Dividend or generate 1.15% return on investment over 90 days.

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

The Gabelli Dividend  vs.  Virtus AllianzGI Convertible

Gabelli Dividend

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Dividend are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Gabelli Dividend is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Virtus AllianzGI Con

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus AllianzGI Convertible has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Virtus AllianzGI is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Dividend and Virtus AllianzGI

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

The idea behind The Gabelli Dividend and Virtus AllianzGI Convertible 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.

Check out your portfolio center.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.