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
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and New is 0.5. 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 The Gabelli Equity is expected to under-perform the New America. But the preferred stock apears to be less risky and, when comparing its historical volatility, The Gabelli Equity is 1.19 times less risky than New America. The preferred stock trades about -0.19 of its potential returns per unit of risk. The New America High is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 813.00 in New America High on August 25, 2024 and sell it today you would earn a total of 14.00 from holding New America High or generate 1.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| 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. The Gabelli Multimedia | Gabelli Equity vs. The Gabelli Multimedia | Gabelli Equity vs. The Gabelli Dividend | Gabelli Equity vs. The Gabelli Equity |
| New America vs. Pioneer Municipal High | New America vs. DWS Municipal Income | New America vs. RiverNorth Specialty Finance | New America vs. Putnam Managed Municipal |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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