Correlation Between Scharf Fund and Gabelli Equity
Can any of the company-specific risk be diversified away by investing in both Scharf Fund and Gabelli Equity 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 Scharf Fund and Gabelli Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Fund Retail and The Gabelli Equity, you can compare the effects of market volatilities on Scharf Fund and Gabelli Equity 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 Scharf Fund with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Fund and Gabelli Equity.
Diversification Opportunities for Scharf Fund and Gabelli Equity
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Scharf and Gabelli is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Fund Retail and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and Scharf Fund 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 Scharf Fund Retail are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Scharf Fund i.e., Scharf Fund and Gabelli Equity go up and down completely randomly.
Pair Corralation between Scharf Fund and Gabelli Equity
Assuming the 90 days horizon Scharf Fund is expected to generate 1.14 times less return on investment than Gabelli Equity. But when comparing it to its historical volatility, Scharf Fund Retail is 1.06 times less risky than Gabelli Equity. It trades about 0.07 of its potential returns per unit of risk. The Gabelli Equity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 537.00 in The Gabelli Equity on September 3, 2024 and sell it today you would earn a total of 112.00 from holding The Gabelli Equity or generate 20.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Fund Retail vs. The Gabelli Equity
Performance |
| Timeline |
| Scharf Fund Retail |
| Gabelli Equity |
Scharf Fund and Gabelli Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Fund and Gabelli Equity
The main advantage of trading using opposite Scharf Fund and Gabelli Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Fund position performs unexpectedly, Gabelli Equity 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 Equity will offset losses from the drop in Gabelli Equity's long position.| Scharf Fund vs. Angel Oak Financial | Scharf Fund vs. Icon Financial Fund | Scharf Fund vs. Mesirow Financial Small | Scharf Fund vs. Gabelli Global Financial |
| Gabelli Equity vs. Health Biotchnology Portfolio | Gabelli Equity vs. Eventide Healthcare Life | Gabelli Equity vs. Baillie Gifford Health | Gabelli Equity vs. Invesco Global Health |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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