Correlation Between Cutler Equity and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Cutler Equity 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 Cutler Equity and The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and The Gabelli Focus, you can compare the effects of market volatilities on Cutler Equity 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 Cutler Equity with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and The Gabelli.
Diversification Opportunities for Cutler Equity and The Gabelli
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cutler and The is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and The Gabelli Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Focus and Cutler Equity 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 Cutler Equity 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 Cutler Equity i.e., Cutler Equity and The Gabelli go up and down completely randomly.
Pair Corralation between Cutler Equity and The Gabelli
Assuming the 90 days horizon Cutler Equity is expected to generate 1.35 times less return on investment than The Gabelli. But when comparing it to its historical volatility, Cutler Equity is 1.07 times less risky than The Gabelli. It trades about 0.3 of its potential returns per unit of risk. The Gabelli Focus is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,831 in The Gabelli Focus on August 31, 2024 and sell it today you would earn a total of 119.00 from holding The Gabelli Focus or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. The Gabelli Focus
Performance |
| Timeline |
| Cutler Equity |
| Gabelli Focus |
Cutler Equity and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and The Gabelli
The main advantage of trading using opposite Cutler Equity and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity 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.| Cutler Equity vs. Blrc Sgy Mnp | Cutler Equity vs. Ambrus Core Bond | Cutler Equity vs. Federated Ohio Municipal | Cutler Equity vs. Legg Mason Partners |
| The Gabelli vs. Gabelli Convertible And | The Gabelli vs. Absolute Convertible Arbitrage | The Gabelli vs. Calamos Dynamic Convertible | The Gabelli vs. Lord Abbett Convertible |
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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