Correlation Between Gabelli Multimedia and New York

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

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

Diversification Opportunities for Gabelli Multimedia and New York

-0.54

Correlation Coefficient

Gabelli Multimedia  New York

Excellent diversification

The 3 months correlation between Gabelli and New is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Multimedia and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage and Gabelli Multimedia 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 Multimedia are associated (or correlated) with New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Gabelli Multimedia i.e., Gabelli Multimedia and New York go up and down completely randomly.

Pair Corralation between Gabelli Multimedia and New York

Assuming the 90 days trading horizon Gabelli Multimedia is expected to generate 1.49 times less return on investment than New York. In addition to that, Gabelli Multimedia is 2.41 times more volatile than New York Mortgage. It trades about 0.02 of its total potential returns per unit of risk. New York Mortgage is currently generating about 0.06 per unit of volatility. If you would invest  1,888  in New York Mortgage on October 3, 2024 and sell it today you would earn a total of  588.00  from holding New York Mortgage or generate 31.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.63%
Values	Daily Returns

The Gabelli Multimedia  vs.  New York Mortgage

The Gabelli Multimedia

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Multimedia has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gabelli Multimedia is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

New York Mortgage

Risk-Adjusted Performance

17 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in New York Mortgage are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, New York is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Multimedia and New York

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

The idea behind The Gabelli Multimedia and New York Mortgage 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.