Correlation Between Mfs Variable and Gabelli Gold

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

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

Diversification Opportunities for Mfs Variable and Gabelli Gold

0.18

Correlation Coefficient

Mfs Variable  Gabelli Gold

Average diversification

The 3 months correlation between Mfs and Gabelli is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Variable Insurance and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold and Mfs Variable 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 Mfs Variable Insurance 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 Mfs Variable i.e., Mfs Variable and Gabelli Gold go up and down completely randomly.

Pair Corralation between Mfs Variable and Gabelli Gold

Assuming the 90 days horizon Mfs Variable Insurance is expected to under-perform the Gabelli Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Variable Insurance is 1.14 times less risky than Gabelli Gold. The mutual fund trades about -0.38 of its potential returns per unit of risk. The Gabelli Gold Fund is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  2,221  in Gabelli Gold Fund on September 20, 2024 and sell it today you would lose (50.00) from holding Gabelli Gold Fund or give up 2.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Mfs Variable Insurance  vs.  Gabelli Gold Fund

Mfs Variable Insurance

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Variable Insurance 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 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 fairly strong basic indicators, Gabelli Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mfs Variable and Gabelli Gold

The main advantage of trading using opposite Mfs Variable and Gabelli Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Variable 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 Mfs Variable Insurance 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.