Correlation Between Gabelli Global and Applied Finance
Can any of the company-specific risk be diversified away by investing in both Gabelli Global and Applied Finance 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 Applied Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Global Mini and Applied Finance Explorer, you can compare the effects of market volatilities on Gabelli Global and Applied Finance 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 Applied Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and Applied Finance.
Diversification Opportunities for Gabelli Global and Applied Finance
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gabelli and Applied is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Mini and Applied Finance Explorer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Finance Explorer 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 Mini are associated (or correlated) with Applied Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Finance Explorer has no effect on the direction of Gabelli Global i.e., Gabelli Global and Applied Finance go up and down completely randomly.
Pair Corralation between Gabelli Global and Applied Finance
Assuming the 90 days horizon Gabelli Global Mini is expected to generate 0.8 times more return on investment than Applied Finance. However, Gabelli Global Mini is 1.24 times less risky than Applied Finance. It trades about 0.38 of its potential returns per unit of risk. Applied Finance Explorer is currently generating about 0.26 per unit of risk. If you would invest 1,123 in Gabelli Global Mini on September 2, 2024 and sell it today you would earn a total of 108.00 from holding Gabelli Global Mini or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Global Mini vs. Applied Finance Explorer
Performance |
| Timeline |
| Gabelli Global Mini |
| Applied Finance Explorer |
Gabelli Global and Applied Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Global and Applied Finance
The main advantage of trading using opposite Gabelli Global and Applied Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Global position performs unexpectedly, Applied Finance 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 Applied Finance will offset losses from the drop in Applied Finance's long position.| Gabelli Global vs. Applied Finance Explorer | Gabelli Global vs. Fpa Queens Road | Gabelli Global vs. Mutual Of America | Gabelli Global vs. Mid Cap Value Profund |
| Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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