Correlation Between Ellsworth Growth and Gabelli Equity
Can any of the company-specific risk be diversified away by investing in both Ellsworth Growth and Gabelli Equity 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 Ellsworth Growth and Gabelli Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellsworth Growth and and The Gabelli Equity, you can compare the effects of market volatilities on Ellsworth Growth and Gabelli Equity 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 Ellsworth Growth with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellsworth Growth and Gabelli Equity.
Diversification Opportunities for Ellsworth Growth and Gabelli Equity
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ellsworth and Gabelli is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ellsworth Growth and and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and Ellsworth Growth 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 Ellsworth Growth and are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Ellsworth Growth i.e., Ellsworth Growth and Gabelli Equity go up and down completely randomly.
Pair Corralation between Ellsworth Growth and Gabelli Equity
Assuming the 90 days trading horizon Ellsworth Growth is expected to generate 1.11 times less return on investment than Gabelli Equity. In addition to that, Ellsworth Growth is 1.22 times more volatile than The Gabelli Equity. It trades about 0.08 of its total potential returns per unit of risk. The Gabelli Equity is currently generating about 0.11 per unit of volatility. If you would invest 2,010 in The Gabelli Equity on September 2, 2024 and sell it today you would earn a total of 309.00 from holding The Gabelli Equity or generate 15.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.19% |
| Values | Daily Returns |
Ellsworth Growth and vs. The Gabelli Equity
Performance |
| Timeline |
| Ellsworth Growth |
| Gabelli Equity |
Ellsworth Growth and Gabelli Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellsworth Growth and Gabelli Equity
The main advantage of trading using opposite Ellsworth Growth and Gabelli Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellsworth Growth position performs unexpectedly, Gabelli Equity 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 Equity will offset losses from the drop in Gabelli Equity's long position.| Ellsworth Growth vs. The Gabelli Equity | Ellsworth Growth vs. The Gabelli Equity | Ellsworth Growth vs. The Gabelli Utility | Ellsworth Growth vs. Bancroft Fund |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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