Correlation Between Gabelli Gold and Fidelity Vertible

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Can any of the company-specific risk be diversified away by investing in both Gabelli Gold and Fidelity Vertible 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 Gold and Fidelity Vertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Gold Fund and Fidelity Vertible Securities, you can compare the effects of market volatilities on Gabelli Gold and Fidelity Vertible 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 Gold with a short position of Fidelity Vertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Gold and Fidelity Vertible.

Diversification Opportunities for Gabelli Gold and Fidelity Vertible

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Gabelli and Fidelity is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Fidelity Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Vertible and Gabelli Gold 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 Gold Fund are associated (or correlated) with Fidelity Vertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Vertible has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Fidelity Vertible go up and down completely randomly.

Pair Corralation between Gabelli Gold and Fidelity Vertible

Assuming the 90 days horizon Gabelli Gold Fund is expected to generate 3.03 times more return on investment than Fidelity Vertible. However, Gabelli Gold is 3.03 times more volatile than Fidelity Vertible Securities. It trades about 0.05 of its potential returns per unit of risk. Fidelity Vertible Securities is currently generating about 0.11 per unit of risk. If you would invest  1,662  in Gabelli Gold Fund on September 12, 2024 and sell it today you would earn a total of  595.00  from holding Gabelli Gold Fund or generate 35.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gabelli Gold Fund  vs.  Fidelity Vertible Securities

 Performance 
       Timeline  
Gabelli Gold 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gabelli Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Gabelli Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Fidelity Vertible 

Risk-Adjusted Performance

25 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Vertible Securities are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Fidelity Vertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gabelli Gold and Fidelity Vertible Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gabelli Gold and Fidelity Vertible

The main advantage of trading using opposite Gabelli Gold and Fidelity Vertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Gold position performs unexpectedly, Fidelity Vertible 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 Fidelity Vertible will offset losses from the drop in Fidelity Vertible's long position.
The idea behind Gabelli Gold Fund and Fidelity Vertible Securities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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