Correlation Between The Arbitrage and Gateway Fund
Can any of the company-specific risk be diversified away by investing in both The Arbitrage and Gateway Fund 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 Gateway Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Arbitrage Fund and Gateway Fund Class, you can compare the effects of market volatilities on The Arbitrage and Gateway Fund 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 Gateway Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Arbitrage and Gateway Fund.
Diversification Opportunities for The Arbitrage and Gateway Fund
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between The and Gateway is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Arbitrage Fund and Gateway Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Fund Class 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 Fund are associated (or correlated) with Gateway Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Fund Class has no effect on the direction of The Arbitrage i.e., The Arbitrage and Gateway Fund go up and down completely randomly.
Pair Corralation between The Arbitrage and Gateway Fund
Assuming the 90 days horizon The Arbitrage is expected to generate 11.97 times less return on investment than Gateway Fund. But when comparing it to its historical volatility, The Arbitrage Fund is 1.62 times less risky than Gateway Fund. It trades about 0.05 of its potential returns per unit of risk. Gateway Fund Class is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 4,540 in Gateway Fund Class on September 1, 2024 and sell it today you would earn a total of 173.00 from holding Gateway Fund Class or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Arbitrage Fund vs. Gateway Fund Class
Performance |
| Timeline |
| The Arbitrage |
| Gateway Fund Class |
The Arbitrage and Gateway Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Arbitrage and Gateway Fund
The main advantage of trading using opposite The Arbitrage and Gateway Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Arbitrage position performs unexpectedly, Gateway Fund 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 Gateway Fund will offset losses from the drop in Gateway Fund's long position.| The Arbitrage vs. The Merger Fund | The Arbitrage vs. Calamos Market Neutral | The Arbitrage vs. Hussman Strategic Growth | The Arbitrage vs. Gateway Fund Class |
| Gateway Fund vs. Dunham Large Cap | Gateway Fund vs. T Rowe Price | Gateway Fund vs. M Large Cap | Gateway Fund vs. Tax Managed Large Cap |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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