Correlation Between Gabelli Gold and State Farm
Can any of the company-specific risk be diversified away by investing in both Gabelli Gold and State Farm 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 State Farm 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 State Farm Balanced, you can compare the effects of market volatilities on Gabelli Gold and State Farm 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 State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Gold and State Farm.
Diversification Opportunities for Gabelli Gold and State Farm
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gabelli and State is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and State Farm Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm Balanced 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 State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm Balanced has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and State Farm go up and down completely randomly.
Pair Corralation between Gabelli Gold and State Farm
Assuming the 90 days horizon Gabelli Gold Fund is expected to generate 3.1 times more return on investment than State Farm. However, Gabelli Gold is 3.1 times more volatile than State Farm Balanced. It trades about 0.05 of its potential returns per unit of risk. State Farm Balanced is currently generating about 0.12 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 | 99.8% |
| Values | Daily Returns |
Gabelli Gold Fund vs. State Farm Balanced
Performance |
| Timeline |
| Gabelli Gold |
| State Farm Balanced |
Gabelli Gold and State Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Gold and State Farm
The main advantage of trading using opposite Gabelli Gold and State Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Gold position performs unexpectedly, State Farm 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 State Farm will offset losses from the drop in State Farm'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 |
| State Farm vs. Sprott Gold Equity | State Farm vs. Invesco Gold Special | State Farm vs. Gabelli Gold Fund | State Farm vs. Global Gold Fund |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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