Correlation Between Gabelli Small and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Gabelli Small and Old Westbury 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 Small and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Small and Old Westbury Large, you can compare the effects of market volatilities on Gabelli Small and Old Westbury 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 Small with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Small and Old Westbury.
Diversification Opportunities for Gabelli Small and Old Westbury
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and Old is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Small and Old Westbury Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Large and Gabelli Small 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 Small are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Large has no effect on the direction of Gabelli Small i.e., Gabelli Small and Old Westbury go up and down completely randomly.
Pair Corralation between Gabelli Small and Old Westbury
Assuming the 90 days horizon Gabelli Small is expected to generate 2.47 times less return on investment than Old Westbury. In addition to that, Gabelli Small is 1.43 times more volatile than Old Westbury Large. It trades about 0.03 of its total potential returns per unit of risk. Old Westbury Large is currently generating about 0.09 per unit of volatility. If you would invest 2,132 in Old Westbury Large on September 13, 2024 and sell it today you would earn a total of 19.00 from holding Old Westbury Large or generate 0.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Small vs. Old Westbury Large
Performance |
| Timeline |
| Gabelli Small |
| Old Westbury Large |
Gabelli Small and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Small and Old Westbury
The main advantage of trading using opposite Gabelli Small and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Small position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Gabelli Small vs. The Gabelli Asset | Gabelli Small vs. The Gabelli Equity | Gabelli Small vs. The Gabelli Growth | Gabelli Small vs. Parnassus E Equity |
| Old Westbury vs. Prudential Government Income | Old Westbury vs. Franklin Adjustable Government | Old Westbury vs. Payden Government Fund | Old Westbury vs. Short Term Government Fund |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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