Correlation Between Apple and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and The Gabelli Global, you can compare the effects of market volatilities on Apple 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 Apple with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and The Gabelli.
Diversification Opportunities for Apple and The Gabelli
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apple and The is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and The Gabelli Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global and Apple 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 Apple Inc 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 Global has no effect on the direction of Apple i.e., Apple and The Gabelli go up and down completely randomly.
Pair Corralation between Apple and The Gabelli
Given the investment horizon of 90 days Apple Inc is expected to generate 1.93 times more return on investment than The Gabelli. However, Apple is 1.93 times more volatile than The Gabelli Global. It trades about 0.08 of its potential returns per unit of risk. The Gabelli Global is currently generating about 0.09 per unit of risk. If you would invest 20,880 in Apple Inc on November 3, 2024 and sell it today you would earn a total of 2,720 from holding Apple Inc or generate 13.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Apple Inc vs. The Gabelli Global
Performance |
| Timeline |
| Apple Inc |
| Gabelli Global |
Apple and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and The Gabelli
The main advantage of trading using opposite Apple and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc and The Gabelli Global 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.| The Gabelli vs. Horizon Active Risk | The Gabelli vs. Calvert Aggressive Allocation | The Gabelli vs. American Beacon Small | The Gabelli vs. Ariel International Fund |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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