Correlation Between Financial Industries and Gabelli Global
Can any of the company-specific risk be diversified away by investing in both Financial Industries 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 Financial Industries and Gabelli Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial Industries Fund and Gabelli Global Financial, you can compare the effects of market volatilities on Financial Industries 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 Financial Industries with a short position of Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial Industries and Gabelli Global.
Diversification Opportunities for Financial Industries and Gabelli Global
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Financial and Gabelli is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Financial Industries 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 Financial Industries 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 Financial Industries 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 Financial Industries i.e., Financial Industries and Gabelli Global go up and down completely randomly.
Pair Corralation between Financial Industries and Gabelli Global
Assuming the 90 days horizon Financial Industries Fund is expected to generate 1.22 times more return on investment than Gabelli Global. However, Financial Industries is 1.22 times more volatile than Gabelli Global Financial. It trades about 0.19 of its potential returns per unit of risk. Gabelli Global Financial is currently generating about 0.19 per unit of risk. If you would invest 1,809 in Financial Industries Fund on October 23, 2024 and sell it today you would earn a total of 72.00 from holding Financial Industries Fund or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Financial Industries Fund vs. Gabelli Global Financial
Performance |
| Timeline |
| Financial Industries |
| Gabelli Global Financial |
Financial Industries and Gabelli Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial Industries and Gabelli Global
The main advantage of trading using opposite Financial Industries and Gabelli Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial Industries 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.| Financial Industries vs. Gabelli Global Financial | Financial Industries vs. Mesirow Financial Small | Financial Industries vs. Icon Financial Fund | Financial Industries vs. Blackrock Financial Institutions |
| Gabelli Global vs. Guggenheim Diversified Income | Gabelli Global vs. Voya Solution Conservative | Gabelli Global vs. Jhancock Diversified Macro | Gabelli Global vs. Allianzgi Diversified Income |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |