Correlation Between World Energy and Gabelli Global
Can any of the company-specific risk be diversified away by investing in both World Energy and Gabelli Global 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 World Energy and Gabelli Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Gabelli Global Financial, you can compare the effects of market volatilities on World Energy and Gabelli Global 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 World Energy with a short position of Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Gabelli Global.
Diversification Opportunities for World Energy and Gabelli Global
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between World and Gabelli is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Gabelli Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Financial and World Energy 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 World Energy Fund are associated (or correlated) with Gabelli Global. 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 Financial has no effect on the direction of World Energy i.e., World Energy and Gabelli Global go up and down completely randomly.
Pair Corralation between World Energy and Gabelli Global
Assuming the 90 days horizon World Energy is expected to generate 2.02 times less return on investment than Gabelli Global. In addition to that, World Energy is 2.09 times more volatile than Gabelli Global Financial. It trades about 0.06 of its total potential returns per unit of risk. Gabelli Global Financial is currently generating about 0.26 per unit of volatility. If you would invest 1,562 in Gabelli Global Financial on November 3, 2024 and sell it today you would earn a total of 82.00 from holding Gabelli Global Financial or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Gabelli Global Financial
Performance |
| Timeline |
| World Energy |
| Gabelli Global Financial |
World Energy and Gabelli Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Gabelli Global
The main advantage of trading using opposite World Energy and Gabelli Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy position performs unexpectedly, Gabelli Global 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 Global will offset losses from the drop in Gabelli Global's long position.| World Energy vs. Chartwell Short Duration | World Energy vs. Needham Aggressive Growth | World Energy vs. Lgm Risk Managed | World Energy vs. Siit High Yield |
| Gabelli Global vs. Fidelity Advisor Financial | Gabelli Global vs. Blackrock Financial Institutions | Gabelli Global vs. John Hancock Financial | Gabelli Global vs. Angel Oak Financial |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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