Correlation Between Gabelli Global and IHIT
Can any of the company-specific risk be diversified away by investing in both Gabelli Global and IHIT 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 IHIT 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 IHIT, you can compare the effects of market volatilities on Gabelli Global and IHIT 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 IHIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and IHIT.
Diversification Opportunities for Gabelli Global and IHIT
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gabelli and IHIT is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Small and IHIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHIT 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 IHIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHIT has no effect on the direction of Gabelli Global i.e., Gabelli Global and IHIT go up and down completely randomly.
Pair Corralation between Gabelli Global and IHIT
Considering the 90-day investment horizon Gabelli Global Small is expected to generate 1.97 times more return on investment than IHIT. However, Gabelli Global is 1.97 times more volatile than IHIT. It trades about 0.02 of its potential returns per unit of risk. IHIT is currently generating about -0.12 per unit of risk. If you would invest 1,128 in Gabelli Global Small on November 1, 2024 and sell it today you would earn a total of 99.00 from holding Gabelli Global Small or generate 8.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 22.72% |
| Values | Daily Returns |
Gabelli Global Small vs. IHIT
Performance |
| Timeline |
| Gabelli Global Small |
| IHIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gabelli Global and IHIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Global and IHIT
The main advantage of trading using opposite Gabelli Global and IHIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Global position performs unexpectedly, IHIT 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 IHIT will offset losses from the drop in IHIT's long position.| Gabelli Global vs. MFS Investment Grade | Gabelli Global vs. Eaton Vance National | Gabelli Global vs. Nuveen California Select | Gabelli Global vs. Federated Premier Municipal |
| IHIT vs. MFS Investment Grade | IHIT vs. Eaton Vance National | IHIT vs. Nuveen California Select | IHIT vs. Federated Premier 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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