Correlation Between Gabelli Global and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Gabelli Global and Dow Jones 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 Global and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Global Small and Dow Jones Industrial, you can compare the effects of market volatilities on Gabelli Global and Dow Jones 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 Global with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and Dow Jones.
Diversification Opportunities for Gabelli Global and Dow Jones
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gabelli and Dow is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Small and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Gabelli Global 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 Global Small are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Gabelli Global i.e., Gabelli Global and Dow Jones go up and down completely randomly.
Pair Corralation between Gabelli Global and Dow Jones
Considering the 90-day investment horizon Gabelli Global Small is expected to generate 1.12 times more return on investment than Dow Jones. However, Gabelli Global is 1.12 times more volatile than Dow Jones Industrial. It trades about 0.21 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.21 per unit of risk. If you would invest 1,223 in Gabelli Global Small on August 25, 2024 and sell it today you would earn a total of 63.00 from holding Gabelli Global Small or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Global Small vs. Dow Jones Industrial
Performance |
| Timeline |
Gabelli Global and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Gabelli Global Small
Pair trading matchups for Gabelli Global
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Gabelli Global and Dow Jones
The main advantage of trading using opposite Gabelli Global and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Global position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Gabelli Global vs. MFS Investment Grade | Gabelli Global vs. Invesco High Income | Gabelli Global vs. Eaton Vance National | Gabelli Global vs. Nuveen California Select |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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