Correlation Between Gabelli Gold and Legg Mason
Can any of the company-specific risk be diversified away by investing in both Gabelli Gold and Legg Mason 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 Legg Mason 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 Legg Mason Partners, you can compare the effects of market volatilities on Gabelli Gold and Legg Mason 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 Legg Mason. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Gold and Legg Mason.
Diversification Opportunities for Gabelli Gold and Legg Mason
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gabelli and Legg is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Legg Mason Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legg Mason Partners 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 Legg Mason. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legg Mason Partners has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Legg Mason go up and down completely randomly.
Pair Corralation between Gabelli Gold and Legg Mason
Assuming the 90 days horizon Gabelli Gold Fund is expected to generate 2.31 times more return on investment than Legg Mason. However, Gabelli Gold is 2.31 times more volatile than Legg Mason Partners. It trades about 0.05 of its potential returns per unit of risk. Legg Mason Partners is currently generating about 0.11 per unit of risk. If you would invest 1,688 in Gabelli Gold Fund on September 14, 2024 and sell it today you would earn a total of 633.00 from holding Gabelli Gold Fund or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Gold Fund vs. Legg Mason Partners
Performance |
| Timeline |
| Gabelli Gold |
| Legg Mason Partners |
Gabelli Gold and Legg Mason Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Gold and Legg Mason
The main advantage of trading using opposite Gabelli Gold and Legg Mason positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Gold position performs unexpectedly, Legg Mason 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 Legg Mason will offset losses from the drop in Legg Mason's long position.| Gabelli Gold vs. Commonwealth Real Estate | Gabelli Gold vs. Virtus Real Estate | Gabelli Gold vs. Prudential Real Estate | Gabelli Gold vs. Neuberger Berman Real |
| Legg Mason vs. Gabelli Gold Fund | Legg Mason vs. Gamco Global Gold | Legg Mason vs. Global Gold Fund | Legg Mason vs. Fidelity Advisor Gold |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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