Correlation Between Gold and Gabelli Gold

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

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

Diversification Opportunities for Gold and Gabelli Gold

1.0

Correlation Coefficient

Gold  Gabelli Gold

No risk reduction

The 3 months correlation between Gold and Gabelli is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Gold And Precious and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold and Gold 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 Gold And Precious 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 Gold i.e., Gold and Gabelli Gold go up and down completely randomly.

Pair Corralation between Gold and Gabelli Gold

Assuming the 90 days horizon Gold And Precious is expected to generate 1.04 times more return on investment than Gabelli Gold. However, Gold is 1.04 times more volatile than Gabelli Gold Fund. It trades about 0.09 of its potential returns per unit of risk. Gabelli Gold Fund is currently generating about 0.08 per unit of risk. If you would invest  837.00  in Gold And Precious on December 3, 2024 and sell it today you would earn a total of  460.00  from holding Gold And Precious or generate 54.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.7%
Values	Daily Returns

Gold And Precious  vs.  Gabelli Gold Fund

Gold And Precious

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gold And Precious are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Gold

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Gold Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Gabelli Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gold and Gabelli Gold

The main advantage of trading using opposite Gold and Gabelli Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold 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 Gold And Precious 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.

Check out your portfolio center.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.