Correlation Between Gabelli Global and Cargile Fund

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

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

Diversification Opportunities for Gabelli Global and Cargile Fund

0.91

Correlation Coefficient

Gabelli Global  Cargile Fund

Almost no diversification

The 3 months correlation between Gabelli and Cargile is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Mini and Cargile Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cargile Fund 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 Mini are associated (or correlated) with Cargile Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cargile Fund has no effect on the direction of Gabelli Global i.e., Gabelli Global and Cargile Fund go up and down completely randomly.

Pair Corralation between Gabelli Global and Cargile Fund

Assuming the 90 days horizon Gabelli Global Mini is expected to generate 2.21 times more return on investment than Cargile Fund. However, Gabelli Global is 2.21 times more volatile than Cargile Fund. It trades about 0.06 of its potential returns per unit of risk. Cargile Fund is currently generating about 0.02 per unit of risk. If you would invest  888.00  in Gabelli Global Mini on September 27, 2024 and sell it today you would earn a total of  315.00  from holding Gabelli Global Mini or generate 35.47% return on investment over 90 days.

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

Gabelli Global Mini  vs.  Cargile Fund

Gabelli Global Mini

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Mini are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gabelli Global may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cargile Fund

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cargile Fund are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Cargile Fund 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 Global and Cargile Fund

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

The idea behind Gabelli Global Mini and Cargile Fund 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.