Correlation Between Saat Aggressive and The Gabelli

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

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

Diversification Opportunities for Saat Aggressive and The Gabelli

0.8

Correlation Coefficient

Saat Aggressive  The Gabelli

Very poor diversification

The 3 months correlation between Saat and The is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Saat Aggressive Strategy and The Gabelli Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Focus and Saat Aggressive 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 Saat Aggressive Strategy 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 Focus has no effect on the direction of Saat Aggressive i.e., Saat Aggressive and The Gabelli go up and down completely randomly.

Pair Corralation between Saat Aggressive and The Gabelli

Assuming the 90 days horizon Saat Aggressive Strategy is expected to under-perform the The Gabelli. But the mutual fund apears to be less risky and, when comparing its historical volatility, Saat Aggressive Strategy is 1.35 times less risky than The Gabelli. The mutual fund trades about -0.25 of its potential returns per unit of risk. The The Gabelli Focus is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  1,939  in The Gabelli Focus on October 9, 2024 and sell it today you would lose (42.00) from holding The Gabelli Focus or give up 2.17% of portfolio value over 90 days.

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

Saat Aggressive Strategy  vs.  The Gabelli Focus

Saat Aggressive Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Gabelli Focus

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Focus are ranked lower than 4 (%) 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 Saat Aggressive and The Gabelli

The main advantage of trading using opposite Saat Aggressive and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Aggressive 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 Saat Aggressive Strategy and The Gabelli Focus 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.