Correlation Between The Gabelli and Pacific Funds
Can any of the company-specific risk be diversified away by investing in both The Gabelli and Pacific Funds 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 The Gabelli and Pacific Funds 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 Pacific Funds Short, you can compare the effects of market volatilities on The Gabelli and Pacific Funds 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 The Gabelli with a short position of Pacific Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gabelli and Pacific Funds.
Diversification Opportunities for The Gabelli and Pacific Funds
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between The and Pacific is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Small and Pacific Funds Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific Funds Short and The Gabelli 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 Pacific Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Funds Short has no effect on the direction of The Gabelli i.e., The Gabelli and Pacific Funds go up and down completely randomly.
Pair Corralation between The Gabelli and Pacific Funds
Assuming the 90 days horizon The Gabelli Small is expected to generate 12.3 times more return on investment than Pacific Funds. However, The Gabelli is 12.3 times more volatile than Pacific Funds Short. It trades about 0.06 of its potential returns per unit of risk. Pacific Funds Short is currently generating about 0.21 per unit of risk. If you would invest 4,335 in The Gabelli Small on September 3, 2024 and sell it today you would earn a total of 380.00 from holding The Gabelli Small or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Small vs. Pacific Funds Short
Performance |
| Timeline |
| Gabelli Small |
| Pacific Funds Short |
The Gabelli and Pacific Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Gabelli and Pacific Funds
The main advantage of trading using opposite The Gabelli and Pacific Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Gabelli position performs unexpectedly, Pacific Funds 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 Pacific Funds will offset losses from the drop in Pacific Funds' long position.| The Gabelli vs. The Gabelli Asset | The Gabelli vs. The Gabelli Equity | The Gabelli vs. The Gabelli Growth | The Gabelli vs. Parnassus E Equity |
| Pacific Funds vs. Rationalpier 88 Convertible | Pacific Funds vs. Absolute Convertible Arbitrage | Pacific Funds vs. Putnam Convertible Incm Gwth | Pacific Funds vs. Rationalpier 88 Convertible |
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 Stocks Directory module to find actively traded stocks across global markets.
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