Correlation Between Gabelli Global and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both Gabelli Global and NXG NextGen 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 NXG NextGen 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 NXG NextGen Infrastructure, you can compare the effects of market volatilities on Gabelli Global and NXG NextGen 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 NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and NXG NextGen.
Diversification Opportunities for Gabelli Global and NXG NextGen
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gabelli and NXG is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Small and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr 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 NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of Gabelli Global i.e., Gabelli Global and NXG NextGen go up and down completely randomly.
Pair Corralation between Gabelli Global and NXG NextGen
Considering the 90-day investment horizon Gabelli Global is expected to generate 2.79 times less return on investment than NXG NextGen. But when comparing it to its historical volatility, Gabelli Global Small is 1.11 times less risky than NXG NextGen. It trades about 0.21 of its potential returns per unit of risk. NXG NextGen Infrastructure is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 4,350 in NXG NextGen Infrastructure on August 28, 2024 and sell it today you would earn a total of 647.00 from holding NXG NextGen Infrastructure or generate 14.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Global Small vs. NXG NextGen Infrastructure
Performance |
| Timeline |
| Gabelli Global Small |
| NXG NextGen Infrastr |
Gabelli Global and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Global and NXG NextGen
The main advantage of trading using opposite Gabelli Global and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Global position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen's long position.| Gabelli Global vs. PowerUp Acquisition Corp | Gabelli Global vs. Aurora Innovation | Gabelli Global vs. HUMANA INC | Gabelli Global vs. Aquagold International |
| NXG NextGen vs. PowerUp Acquisition Corp | NXG NextGen vs. Aurora Innovation | NXG NextGen vs. HUMANA INC | NXG NextGen vs. Aquagold International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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