Correlation Between Gabelli Gold and Siit Ultra

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

Diversification Opportunities for Gabelli Gold and Siit Ultra

-0.59

Correlation Coefficient

Gabelli Gold  Siit Ultra

Excellent diversification

The 3 months correlation between Gabelli and Siit is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Siit Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Ultra Short 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 Siit Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Ultra Short has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Siit Ultra go up and down completely randomly.

Pair Corralation between Gabelli Gold and Siit Ultra

Assuming the 90 days horizon Gabelli Gold Fund is expected to generate 16.29 times more return on investment than Siit Ultra. However, Gabelli Gold is 16.29 times more volatile than Siit Ultra Short. It trades about 0.03 of its potential returns per unit of risk. Siit Ultra Short is currently generating about 0.21 per unit of risk. If you would invest  1,767  in Gabelli Gold Fund on September 26, 2024 and sell it today you would earn a total of  316.00  from holding Gabelli Gold Fund or generate 17.88% return on investment over 90 days.

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

Gabelli Gold Fund  vs.  Siit Ultra Short

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 weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Siit Ultra Short

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Ultra Short are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit Ultra 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 Siit Ultra

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

The idea behind Gabelli Gold Fund and Siit Ultra Short 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.