Correlation Between Capital World and Gabelli Gold
Can any of the company-specific risk be diversified away by investing in both Capital World and Gabelli Gold 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 Capital World and Gabelli Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Bond and Gabelli Gold Fund, you can compare the effects of market volatilities on Capital World and Gabelli Gold 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 Capital World with a short position of Gabelli Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Gabelli Gold.
Diversification Opportunities for Capital World and Gabelli Gold
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capital and Gabelli is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Bond and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold and Capital World 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 Capital World Bond are associated (or correlated) with Gabelli Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Gold has no effect on the direction of Capital World i.e., Capital World and Gabelli Gold go up and down completely randomly.
Pair Corralation between Capital World and Gabelli Gold
Assuming the 90 days horizon Capital World Bond is expected to under-perform the Gabelli Gold. But the mutual fund apears to be less risky and, when comparing its historical volatility, Capital World Bond is 4.95 times less risky than Gabelli Gold. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Gabelli Gold Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,122 in Gabelli Gold Fund on September 4, 2024 and sell it today you would earn a total of 109.00 from holding Gabelli Gold Fund or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Capital World Bond vs. Gabelli Gold Fund
Performance |
| Timeline |
| Capital World Bond |
| Gabelli Gold |
Capital World and Gabelli Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Gabelli Gold
The main advantage of trading using opposite Capital World and Gabelli Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World position performs unexpectedly, Gabelli Gold 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 Gold will offset losses from the drop in Gabelli Gold's long position.| Capital World vs. Gabelli Gold Fund | Capital World vs. Global Gold Fund | Capital World vs. International Investors Gold | Capital World vs. Gamco Global Gold |
| Gabelli Gold vs. Gabelli Esg Fund | Gabelli Gold vs. Gabelli Global Financial | Gabelli Gold vs. The Gabelli Equity | Gabelli Gold vs. Gamco International Growth |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |