Correlation Between Victory Rs and The Gabelli

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

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

Diversification Opportunities for Victory Rs and The Gabelli

-0.42

Correlation Coefficient

Victory Rs  The Gabelli

Very good diversification

The 3 months correlation between Victory and The is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Victory Rs Partners and The Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and Victory Rs 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 Victory Rs Partners 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 Utilities has no effect on the direction of Victory Rs i.e., Victory Rs and The Gabelli go up and down completely randomly.

Pair Corralation between Victory Rs and The Gabelli

Assuming the 90 days horizon Victory Rs Partners is expected to under-perform the The Gabelli. In addition to that, Victory Rs is 1.18 times more volatile than The Gabelli Utilities. It trades about -0.06 of its total potential returns per unit of risk. The Gabelli Utilities is currently generating about 0.12 per unit of volatility. If you would invest  547.00  in The Gabelli Utilities on December 29, 2024 and sell it today you would earn a total of  33.00  from holding The Gabelli Utilities or generate 6.03% return on investment over 90 days.

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

Victory Rs Partners  vs.  The Gabelli Utilities

Victory Rs Partners

Risk-Adjusted Performance

Very Weak

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

Gabelli Utilities

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Utilities are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, The Gabelli is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Victory Rs and The Gabelli

The main advantage of trading using opposite Victory Rs and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Rs 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 Victory Rs Partners and The Gabelli Utilities 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.