Correlation Between Gabelli Gold and Dreyfus International

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

By analyzing existing cross correlation between Gabelli Gold Fund and Dreyfus International Bond, you can compare the effects of market volatilities on Gabelli Gold and Dreyfus International 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 Gold with a short position of Dreyfus International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Gold and Dreyfus International.

Diversification Opportunities for Gabelli Gold and Dreyfus International

0.33

Correlation Coefficient

Gabelli Gold  Dreyfus International

Weak diversification

The 3 months correlation between Gabelli and Dreyfus is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Dreyfus International Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus International and Gabelli Gold 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 Gold Fund are associated (or correlated) with Dreyfus International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus International has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Dreyfus International go up and down completely randomly.

Pair Corralation between Gabelli Gold and Dreyfus International

If you would invest  2,036  in Gabelli Gold Fund on October 26, 2024 and sell it today you would earn a total of  192.00  from holding Gabelli Gold Fund or generate 9.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Gabelli Gold Fund  vs.  Dreyfus International Bond

Gabelli Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Gabelli Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dreyfus International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus International Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Dreyfus International 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 Gold and Dreyfus International

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

The idea behind Gabelli Gold Fund and Dreyfus International Bond 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.