Correlation Between Gabelli Dividend and Platinum Asia

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

Diversification Opportunities for Gabelli Dividend and Platinum Asia

0.15

Correlation Coefficient

Gabelli Dividend  Platinum Asia

Average diversification

The 3 months correlation between Gabelli and Platinum is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Dividend and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia Investments 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 Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Gabelli Dividend i.e., Gabelli Dividend and Platinum Asia go up and down completely randomly.

Pair Corralation between Gabelli Dividend and Platinum Asia

Assuming the 90 days trading horizon The Gabelli Dividend is expected to under-perform the Platinum Asia. But the preferred stock apears to be less risky and, when comparing its historical volatility, The Gabelli Dividend is 1.33 times less risky than Platinum Asia. The preferred stock trades about -0.01 of its potential returns per unit of risk. The Platinum Asia Investments is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,231  in Platinum Asia Investments on December 30, 2024 and sell it today you would earn a total of  46.00  from holding Platinum Asia Investments or generate 3.74% return on investment over 90 days.

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

The Gabelli Dividend  vs.  Platinum Asia Investments

Gabelli Dividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Gabelli Dividend is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Platinum Asia Investments

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Platinum Asia Investments are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Platinum Asia is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Gabelli Dividend and Platinum Asia

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

The idea behind The Gabelli Dividend and Platinum Asia Investments 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.