Correlation Between Gabelli Gold and Vy(r) Morgan

Can any of the company-specific risk be diversified away by investing in both Gabelli Gold and Vy(r) Morgan 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 Vy(r) Morgan 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 Vy Morgan Stanley, you can compare the effects of market volatilities on Gabelli Gold and Vy(r) Morgan 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 Vy(r) Morgan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Gold and Vy(r) Morgan.

Diversification Opportunities for Gabelli Gold and Vy(r) Morgan

0.53

Correlation Coefficient

Gabelli Gold  Vy(r) Morgan

Very weak diversification

The 3 months correlation between Gabelli and Vy(r) is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Vy Morgan Stanley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Morgan Stanley 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 Vy(r) Morgan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Morgan Stanley has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Vy(r) Morgan go up and down completely randomly.

Pair Corralation between Gabelli Gold and Vy(r) Morgan

Assuming the 90 days horizon Gabelli Gold Fund is expected to under-perform the Vy(r) Morgan. In addition to that, Gabelli Gold is 2.88 times more volatile than Vy Morgan Stanley. It trades about -0.21 of its total potential returns per unit of risk. Vy Morgan Stanley is currently generating about -0.26 per unit of volatility. If you would invest  1,411  in Vy Morgan Stanley on October 9, 2024 and sell it today you would lose (45.00) from holding Vy Morgan Stanley or give up 3.19% of portfolio value over 90 days.

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

Gabelli Gold Fund  vs.  Vy Morgan Stanley

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.

Vy Morgan Stanley

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vy Morgan Stanley has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Vy(r) Morgan 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 Vy(r) Morgan

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

The idea behind Gabelli Gold Fund and Vy Morgan Stanley 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.