Correlation Between Gabelli Merger and VinaCapital Vietnam

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

By analyzing existing cross correlation between Gabelli Merger Plus and VinaCapital Vietnam Opportunity, you can compare the effects of market volatilities on Gabelli Merger and VinaCapital Vietnam 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 Merger with a short position of VinaCapital Vietnam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Merger and VinaCapital Vietnam.

Diversification Opportunities for Gabelli Merger and VinaCapital Vietnam

0.79

Correlation Coefficient

Gabelli Merger  VinaCapital Vietnam

Poor diversification

The 3 months correlation between Gabelli and VinaCapital is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Merger Plus and VinaCapital Vietnam Opportunit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VinaCapital Vietnam and Gabelli Merger 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 Merger Plus are associated (or correlated) with VinaCapital Vietnam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VinaCapital Vietnam has no effect on the direction of Gabelli Merger i.e., Gabelli Merger and VinaCapital Vietnam go up and down completely randomly.

Pair Corralation between Gabelli Merger and VinaCapital Vietnam

Assuming the 90 days trading horizon Gabelli Merger Plus is expected to under-perform the VinaCapital Vietnam. In addition to that, Gabelli Merger is 3.83 times more volatile than VinaCapital Vietnam Opportunity. It trades about -0.07 of its total potential returns per unit of risk. VinaCapital Vietnam Opportunity is currently generating about -0.08 per unit of volatility. If you would invest  45,362  in VinaCapital Vietnam Opportunity on September 5, 2024 and sell it today you would lose (1,962) from holding VinaCapital Vietnam Opportunity or give up 4.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.46%
Values	Daily Returns

Gabelli Merger Plus  vs.  VinaCapital Vietnam Opportunit

Gabelli Merger Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Merger Plus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

VinaCapital Vietnam

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VinaCapital Vietnam Opportunity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, VinaCapital Vietnam is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gabelli Merger and VinaCapital Vietnam

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

The idea behind Gabelli Merger Plus and VinaCapital Vietnam Opportunity 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .