Correlation Between Kopernik International and Gabelli Global

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

By analyzing existing cross correlation between Kopernik International and Gabelli Global Financial, you can compare the effects of market volatilities on Kopernik International and Gabelli Global 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 Kopernik International with a short position of Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kopernik International and Gabelli Global.

Diversification Opportunities for Kopernik International and Gabelli Global

-0.16

Correlation Coefficient

Kopernik International  Gabelli Global

Good diversification

The 3 months correlation between Kopernik and Gabelli is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kopernik International and Gabelli Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Financial and Kopernik International 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 Kopernik International are associated (or correlated) with Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Financial has no effect on the direction of Kopernik International i.e., Kopernik International and Gabelli Global go up and down completely randomly.

Pair Corralation between Kopernik International and Gabelli Global

Assuming the 90 days horizon Kopernik International is expected to generate 3.15 times less return on investment than Gabelli Global. But when comparing it to its historical volatility, Kopernik International is 2.52 times less risky than Gabelli Global. It trades about 0.15 of its potential returns per unit of risk. Gabelli Global Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,560  in Gabelli Global Financial on October 23, 2024 and sell it today you would earn a total of  50.00  from holding Gabelli Global Financial or generate 3.21% return on investment over 90 days.

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

Kopernik International  vs.  Gabelli Global Financial

Kopernik International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kopernik International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Gabelli Global Financial

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Financial are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gabelli Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kopernik International and Gabelli Global

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

The idea behind Kopernik International and Gabelli Global Financial 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.