Correlation Between Qs Defensive and Gabelli Gold

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

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

Diversification Opportunities for Qs Defensive and Gabelli Gold

-0.14

Correlation Coefficient

Qs Defensive  Gabelli Gold

Good diversification

The 3 months correlation between LMLRX and Gabelli is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Qs Defensive Growth and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold and Qs Defensive 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 Qs Defensive Growth are associated (or correlated) with Gabelli Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Gold has no effect on the direction of Qs Defensive i.e., Qs Defensive and Gabelli Gold go up and down completely randomly.

Pair Corralation between Qs Defensive and Gabelli Gold

Assuming the 90 days horizon Qs Defensive Growth is expected to generate 0.2 times more return on investment than Gabelli Gold. However, Qs Defensive Growth is 4.97 times less risky than Gabelli Gold. It trades about -0.05 of its potential returns per unit of risk. Gabelli Gold Fund is currently generating about -0.12 per unit of risk. If you would invest  1,332  in Qs Defensive Growth on September 26, 2024 and sell it today you would lose (16.00) from holding Qs Defensive Growth or give up 1.2% of portfolio value over 90 days.

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

Qs Defensive Growth  vs.  Gabelli Gold Fund

Qs Defensive Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qs Defensive Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Qs Defensive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Qs Defensive and Gabelli Gold

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

The idea behind Qs Defensive Growth and Gabelli Gold 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 Transaction History module to view history of all your transactions and understand their impact on performance.