Correlation Between American Funds and The Gabelli
Can any of the company-specific risk be diversified away by investing in both American Funds and The Gabelli 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 American Funds and The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Growth and The Gabelli Focus, you can compare the effects of market volatilities on American Funds and The Gabelli 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 American Funds with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and The Gabelli.
Diversification Opportunities for American Funds and The Gabelli
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AMERICAN and The is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Growth and The Gabelli Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Focus and American Funds 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 American Funds Growth are associated (or correlated) with The Gabelli. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Focus has no effect on the direction of American Funds i.e., American Funds and The Gabelli go up and down completely randomly.
Pair Corralation between American Funds and The Gabelli
Assuming the 90 days horizon American Funds Growth is expected to generate 1.07 times more return on investment than The Gabelli. However, American Funds is 1.07 times more volatile than The Gabelli Focus. It trades about 0.14 of its potential returns per unit of risk. The Gabelli Focus is currently generating about 0.12 per unit of risk. If you would invest 1,937 in American Funds Growth on September 1, 2024 and sell it today you would earn a total of 692.00 from holding American Funds Growth or generate 35.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds Growth vs. The Gabelli Focus
Performance |
| Timeline |
| American Funds Growth |
| Gabelli Focus |
American Funds and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and The Gabelli
The main advantage of trading using opposite American Funds and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, The Gabelli 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 The Gabelli will offset losses from the drop in The Gabelli's long position.| American Funds vs. Income Fund Of | American Funds vs. New World Fund | American Funds vs. American Mutual Fund | American Funds vs. American Mutual Fund |
| The Gabelli vs. Chase Growth Fund | The Gabelli vs. Nationwide Growth Fund | The Gabelli vs. Vanguard Growth And | The Gabelli vs. Kinetics Small Cap |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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