Correlation Between The Arbitrage and The Gabelli
Can any of the company-specific risk be diversified away by investing in both The Arbitrage 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 The Arbitrage and The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arbitrage Event Driven and The Gabelli Focus, you can compare the effects of market volatilities on The Arbitrage 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 The Arbitrage with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Arbitrage and The Gabelli.
Diversification Opportunities for The Arbitrage and The Gabelli
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between The and The is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Event Driven and The Gabelli Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Focus and The Arbitrage 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 Arbitrage Event Driven 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 The Arbitrage i.e., The Arbitrage and The Gabelli go up and down completely randomly.
Pair Corralation between The Arbitrage and The Gabelli
Assuming the 90 days horizon The Arbitrage Event Driven is expected to under-perform the The Gabelli. But the mutual fund apears to be less risky and, when comparing its historical volatility, The Arbitrage Event Driven is 2.51 times less risky than The Gabelli. The mutual fund trades about -0.09 of its potential returns per unit of risk. The The Gabelli Focus is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,851 in The Gabelli Focus on August 29, 2024 and sell it today you would earn a total of 77.00 from holding The Gabelli Focus or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
The Arbitrage Event Driven vs. The Gabelli Focus
Performance |
| Timeline |
| Arbitrage Event |
| Gabelli Focus |
The Arbitrage and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Arbitrage and The Gabelli
The main advantage of trading using opposite The Arbitrage and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Arbitrage 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 Arbitrage vs. Aqr Diversified Arbitrage | The Arbitrage vs. Baron Emerging Markets | The Arbitrage vs. The Arbitrage Fund | The Arbitrage vs. Brandes Emerging Markets |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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