Correlation Between New Alternatives and Gabelli Esg

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

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

Diversification Opportunities for New Alternatives and Gabelli Esg

0.29

Correlation Coefficient

New Alternatives  Gabelli Esg

Modest diversification

The 3 months correlation between New and Gabelli is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding New Alternatives Fund and Gabelli Esg Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Esg Fund and New Alternatives 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 New Alternatives Fund are associated (or correlated) with Gabelli Esg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Esg Fund has no effect on the direction of New Alternatives i.e., New Alternatives and Gabelli Esg go up and down completely randomly.

Pair Corralation between New Alternatives and Gabelli Esg

Assuming the 90 days horizon New Alternatives Fund is expected to under-perform the Gabelli Esg. But the mutual fund apears to be less risky and, when comparing its historical volatility, New Alternatives Fund is 1.42 times less risky than Gabelli Esg. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Gabelli Esg Fund is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,393  in Gabelli Esg Fund on September 13, 2024 and sell it today you would lose (86.00) from holding Gabelli Esg Fund or give up 6.17% of portfolio value over 90 days.

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

New Alternatives Fund  vs.  Gabelli Esg Fund

New Alternatives

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gabelli Esg Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with New Alternatives and Gabelli Esg

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

The idea behind New Alternatives Fund and Gabelli Esg 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.