Correlation Between Gabelli Global and CBH

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

By analyzing existing cross correlation between Gabelli Global Small and CBH, you can compare the effects of market volatilities on Gabelli Global and CBH 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 CBH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and CBH.

Diversification Opportunities for Gabelli Global and CBH

0.83

Correlation Coefficient

Gabelli Global  CBH

Very poor diversification

The 3 months correlation between Gabelli and CBH is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Small and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH 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 Small are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Gabelli Global i.e., Gabelli Global and CBH go up and down completely randomly.

Pair Corralation between Gabelli Global and CBH

If you would invest  1,179  in Gabelli Global Small on September 2, 2024 and sell it today you would earn a total of  126.00  from holding Gabelli Global Small or generate 10.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.56%
Values	Daily Returns

Gabelli Global Small  vs.  CBH

Gabelli Global Small

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Small are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Gabelli Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Gabelli Global and CBH

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

The idea behind Gabelli Global Small and CBH 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.