Correlation Between Gabelli Global and The Gabelli

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

Diversification Opportunities for Gabelli Global and The Gabelli

0.64

Correlation Coefficient

Gabelli Global  The Gabelli

Poor diversification

The 3 months correlation between Gabelli and The is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Mini and The Gabelli Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Growth 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 The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Growth has no effect on the direction of Gabelli Global i.e., Gabelli Global and The Gabelli go up and down completely randomly.

Pair Corralation between Gabelli Global and The Gabelli

Assuming the 90 days horizon Gabelli Global Mini is expected to generate 1.0 times more return on investment than The Gabelli. However, Gabelli Global Mini is 1.0 times less risky than The Gabelli. It trades about 0.26 of its potential returns per unit of risk. The Gabelli Growth is currently generating about 0.2 per unit of risk. If you would invest  1,057  in Gabelli Global Mini on September 5, 2024 and sell it today you would earn a total of  180.00  from holding Gabelli Global Mini or generate 17.03% return on investment over 90 days.

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

Gabelli Global Mini  vs.  The Gabelli Growth

Gabelli Global Mini

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Mini are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gabelli Global showed solid returns over the last few months and may actually be approaching a breakup point.

Gabelli Growth

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Growth are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, The Gabelli showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gabelli Global and The Gabelli

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

The idea behind Gabelli Global Mini and The Gabelli 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.