Correlation Between Nasdaq 100 and The Gabelli

Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nasdaq 100 Fund Investor and The Gabelli Asset, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and The Gabelli.

Diversification Opportunities for Nasdaq 100 and The Gabelli

0.55

Correlation Coefficient

Nasdaq 100  The Gabelli

Very weak diversification

The 3 months correlation between Nasdaq and The is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Investor and The Gabelli Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Asset and Nasdaq 100 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 Nasdaq 100 Fund Investor 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 Asset has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and The Gabelli go up and down completely randomly.

Pair Corralation between Nasdaq 100 and The Gabelli

Assuming the 90 days horizon Nasdaq 100 Fund Investor is expected to under-perform the The Gabelli. In addition to that, Nasdaq 100 is 1.71 times more volatile than The Gabelli Asset. It trades about -0.06 of its total potential returns per unit of risk. The Gabelli Asset is currently generating about 0.04 per unit of volatility. If you would invest  3,894  in The Gabelli Asset on December 27, 2024 and sell it today you would earn a total of  63.00  from holding The Gabelli Asset or generate 1.62% return on investment over 90 days.

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

Nasdaq 100 Fund Investor  vs.  The Gabelli Asset

Nasdaq 100 Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq 100 Fund Investor has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Nasdaq 100 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Asset

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Asset are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental 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 Nasdaq 100 and The Gabelli

The main advantage of trading using opposite Nasdaq 100 and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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 Nasdaq 100 Fund Investor and The Gabelli Asset 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.