Correlation Between Virtus AllianzGI and Gabelli Dividend

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

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

Diversification Opportunities for Virtus AllianzGI and Gabelli Dividend

0.0

Correlation Coefficient

Virtus AllianzGI  Gabelli Dividend

Pay attention - limited upside

The 3 months correlation between Virtus and Gabelli is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Virtus AllianzGI Convertible and The Gabelli Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend and Virtus AllianzGI 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 Virtus AllianzGI Convertible are associated (or correlated) with Gabelli Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend has no effect on the direction of Virtus AllianzGI i.e., Virtus AllianzGI and Gabelli Dividend go up and down completely randomly.

Pair Corralation between Virtus AllianzGI and Gabelli Dividend

Assuming the 90 days trading horizon Virtus AllianzGI Convertible is expected to generate 0.8 times more return on investment than Gabelli Dividend. However, Virtus AllianzGI Convertible is 1.24 times less risky than Gabelli Dividend. It trades about 0.22 of its potential returns per unit of risk. The Gabelli Dividend is currently generating about -0.01 per unit of risk. If you would invest  2,065  in Virtus AllianzGI Convertible on December 30, 2024 and sell it today you would earn a total of  130.00  from holding Virtus AllianzGI Convertible or generate 6.3% return on investment over 90 days.

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

Virtus AllianzGI Convertible  vs.  The Gabelli Dividend

Virtus AllianzGI Con

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Virtus AllianzGI Convertible are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Virtus AllianzGI is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Dividend

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Dividend has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Gabelli Dividend is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Virtus AllianzGI and Gabelli Dividend

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

The idea behind Virtus AllianzGI Convertible and The Gabelli Dividend 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.