Correlation Between Gabelli Gold and Clearbridge Aggressive

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

Diversification Opportunities for Gabelli Gold and Clearbridge Aggressive

0.09

Correlation Coefficient

Gabelli Gold  Clearbridge Aggressive

Significant diversification

The 3 months correlation between Gabelli and Clearbridge is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Clearbridge Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Aggressive 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 Clearbridge Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Aggressive has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Clearbridge Aggressive go up and down completely randomly.

Pair Corralation between Gabelli Gold and Clearbridge Aggressive

Assuming the 90 days horizon Gabelli Gold is expected to generate 2.73 times less return on investment than Clearbridge Aggressive. In addition to that, Gabelli Gold is 1.77 times more volatile than Clearbridge Aggressive Growth. It trades about 0.04 of its total potential returns per unit of risk. Clearbridge Aggressive Growth is currently generating about 0.21 per unit of volatility. If you would invest  13,934  in Clearbridge Aggressive Growth on September 3, 2024 and sell it today you would earn a total of  1,814  from holding Clearbridge Aggressive Growth or generate 13.02% return on investment over 90 days.

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

Gabelli Gold Fund  vs.  Clearbridge Aggressive Growth

Gabelli Gold

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Gold Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.

Clearbridge Aggressive

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clearbridge Aggressive Growth are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Clearbridge Aggressive may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gabelli Gold and Clearbridge Aggressive

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

The idea behind Gabelli Gold Fund and Clearbridge Aggressive Growth 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..