Correlation Between Gabelli Healthcare and Simt Multi

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

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

Diversification Opportunities for Gabelli Healthcare and Simt Multi

0.67

Correlation Coefficient

Gabelli Healthcare  Simt Multi

Poor diversification

The 3 months correlation between Gabelli and Simt is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Healthcare and Simt Multi Asset Accumulation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset and Gabelli Healthcare 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 The Gabelli Healthcare are associated (or correlated) with Simt Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Gabelli Healthcare i.e., Gabelli Healthcare and Simt Multi go up and down completely randomly.

Pair Corralation between Gabelli Healthcare and Simt Multi

Assuming the 90 days horizon Gabelli Healthcare is expected to generate 1.16 times less return on investment than Simt Multi. In addition to that, Gabelli Healthcare is 1.68 times more volatile than Simt Multi Asset Accumulation. It trades about 0.04 of its total potential returns per unit of risk. Simt Multi Asset Accumulation is currently generating about 0.08 per unit of volatility. If you would invest  668.00  in Simt Multi Asset Accumulation on September 15, 2024 and sell it today you would earn a total of  76.00  from holding Simt Multi Asset Accumulation or generate 11.38% return on investment over 90 days.

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

The Gabelli Healthcare  vs.  Simt Multi Asset Accumulation

The Gabelli Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Simt Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gabelli Healthcare and Simt Multi

The main advantage of trading using opposite Gabelli Healthcare and Simt Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Healthcare position performs unexpectedly, Simt Multi 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 Simt Multi will offset losses from the drop in Simt Multi's long position.

The idea behind The Gabelli Healthcare and Simt Multi Asset Accumulation 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.