Correlation Between Gabelli Equity and New America
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and New America 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 Gabelli Equity and New America into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Equity and New America High, you can compare the effects of market volatilities on Gabelli Equity and New America 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 Gabelli Equity with a short position of New America. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and New America.
Diversification Opportunities for Gabelli Equity and New America
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gabelli and New is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and New America High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New America High and Gabelli 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 The Gabelli Equity are associated (or correlated) with New America. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New America High has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and New America go up and down completely randomly.
Pair Corralation between Gabelli Equity and New America
Assuming the 90 days trading horizon Gabelli Equity is expected to generate 2.37 times less return on investment than New America. In addition to that, Gabelli Equity is 1.84 times more volatile than New America High. It trades about 0.07 of its total potential returns per unit of risk. New America High is currently generating about 0.31 per unit of volatility. If you would invest 807.00 in New America High on October 23, 2024 and sell it today you would earn a total of 15.00 from holding New America High or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Equity vs. New America High
Performance |
| Timeline |
| Gabelli Equity |
| New America High |
Gabelli Equity and New America Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and New America
The main advantage of trading using opposite Gabelli Equity and New America positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, New America 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 New America will offset losses from the drop in New America's long position.| Gabelli Equity vs. Virtus AllianzGI Convertible | Gabelli Equity vs. The Gabelli Equity | Gabelli Equity vs. Oxford Lane Capital | Gabelli Equity vs. The Gabelli Utility |
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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