Correlation Between Heartland Value and The Gabelli

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

By analyzing existing cross correlation between Heartland Value Fund and The Gabelli Asset, you can compare the effects of market volatilities on Heartland Value 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 Heartland Value with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Value and The Gabelli.

Diversification Opportunities for Heartland Value and The Gabelli

0.92

Correlation Coefficient

Heartland Value  The Gabelli

Almost no diversification

The 3 months correlation between Heartland and The is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Value Fund and The Gabelli Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Asset and Heartland Value 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 Heartland Value Fund 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 Asset has no effect on the direction of Heartland Value i.e., Heartland Value and The Gabelli go up and down completely randomly.

Pair Corralation between Heartland Value and The Gabelli

Assuming the 90 days horizon Heartland Value Fund is expected to generate 1.58 times more return on investment than The Gabelli. However, Heartland Value is 1.58 times more volatile than The Gabelli Asset. It trades about 0.19 of its potential returns per unit of risk. The Gabelli Asset is currently generating about 0.16 per unit of risk. If you would invest  4,938  in Heartland Value Fund on September 3, 2024 and sell it today you would earn a total of  669.00  from holding Heartland Value Fund or generate 13.55% return on investment over 90 days.

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

Heartland Value Fund  vs.  The Gabelli Asset

Heartland Value

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Heartland Value Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Heartland Value showed solid returns over the last few months and may actually be approaching a breakup point.

Gabelli Asset

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Asset are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, The Gabelli may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Heartland Value and The Gabelli

The main advantage of trading using opposite Heartland Value and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Value 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 Heartland Value Fund and The Gabelli Asset 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.