Correlation Between Multimanager Lifestyle and Gabelli Dividend

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

Diversification Opportunities for Multimanager Lifestyle and Gabelli Dividend

MultimanagerGabelliDiversified AwayMultimanagerGabelliDiversified Away100%
0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Multimanager and Gabelli is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Multimanager Lifestyle Balance and Gabelli Dividend Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend Income and Multimanager Lifestyle 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 Multimanager Lifestyle Balanced are associated (or correlated) with Gabelli Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend Income has no effect on the direction of Multimanager Lifestyle i.e., Multimanager Lifestyle and Gabelli Dividend go up and down completely randomly.

Pair Corralation between Multimanager Lifestyle and Gabelli Dividend

Assuming the 90 days horizon Multimanager Lifestyle Balanced is expected to generate 0.7 times more return on investment than Gabelli Dividend. However, Multimanager Lifestyle Balanced is 1.43 times less risky than Gabelli Dividend. It trades about 0.02 of its potential returns per unit of risk. Gabelli Dividend Income is currently generating about -0.04 per unit of risk. If you would invest  1,360  in Multimanager Lifestyle Balanced on November 27, 2024 and sell it today you would earn a total of  2.00  from holding Multimanager Lifestyle Balanced or generate 0.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Multimanager Lifestyle Balance  vs.  Gabelli Dividend Income

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -2-101234
JavaScript chart by amCharts 3.21.15JQLBX GDV
       Timeline  
Multimanager Lifestyle 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Multimanager Lifestyle Balanced has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Multimanager Lifestyle is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb13.213.313.413.513.613.713.8
Gabelli Dividend Income 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Gabelli Dividend Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable fundamental indicators, Gabelli Dividend is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb23.52424.52525.5

Multimanager Lifestyle and Gabelli Dividend Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.48-1.09-0.7-0.310.0062630.310.71.091.481.87 0.51.01.5
JavaScript chart by amCharts 3.21.15JQLBX GDV
       Returns  

Pair Trading with Multimanager Lifestyle and Gabelli Dividend

The main advantage of trading using opposite Multimanager Lifestyle and Gabelli Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multimanager Lifestyle position performs unexpectedly, Gabelli Dividend 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 Gabelli Dividend will offset losses from the drop in Gabelli Dividend's long position.
The idea behind Multimanager Lifestyle Balanced and Gabelli Dividend Income 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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