Correlation Between Gabelli Equity and Osterweis Emerging
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and Osterweis Emerging 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 Osterweis Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Equity Trust and Osterweis Emerging Opportunity, you can compare the effects of market volatilities on Gabelli Equity and Osterweis Emerging 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 Osterweis Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and Osterweis Emerging.
Diversification Opportunities for Gabelli Equity and Osterweis Emerging
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gabelli and Osterweis is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and Osterweis Emerging Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Osterweis Emerging 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 Gabelli Equity Trust are associated (or correlated) with Osterweis Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Osterweis Emerging has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Osterweis Emerging go up and down completely randomly.
Pair Corralation between Gabelli Equity and Osterweis Emerging
Considering the 90-day investment horizon Gabelli Equity is expected to generate 2.45 times less return on investment than Osterweis Emerging. But when comparing it to its historical volatility, Gabelli Equity Trust is 1.17 times less risky than Osterweis Emerging. It trades about 0.04 of its potential returns per unit of risk. Osterweis Emerging Opportunity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,187 in Osterweis Emerging Opportunity on August 29, 2024 and sell it today you would earn a total of 715.00 from holding Osterweis Emerging Opportunity or generate 60.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Equity Trust vs. Osterweis Emerging Opportunity
Performance |
| Timeline |
| Gabelli Equity Trust |
| Osterweis Emerging |
Gabelli Equity and Osterweis Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and Osterweis Emerging
The main advantage of trading using opposite Gabelli Equity and Osterweis Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, Osterweis Emerging 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 Osterweis Emerging will offset losses from the drop in Osterweis Emerging's long position.| Gabelli Equity vs. Gabelli Utility Closed | Gabelli Equity vs. Gabelli MultiMedia Mutual | Gabelli Equity vs. Gabelli Healthcare WellnessRx | Gabelli Equity vs. Liberty All Star |
| Osterweis Emerging vs. Gamco Natural Resources | Osterweis Emerging vs. Franklin Natural Resources | Osterweis Emerging vs. Ivy Natural Resources | Osterweis Emerging vs. Alpsalerian Energy Infrastructure |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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