Correlation Between Gabelli ETFs and Vanguard Momentum
Can any of the company-specific risk be diversified away by investing in both Gabelli ETFs and Vanguard Momentum 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 ETFs and Vanguard Momentum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli ETFs Trust and Vanguard Momentum Factor, you can compare the effects of market volatilities on Gabelli ETFs and Vanguard Momentum 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 ETFs with a short position of Vanguard Momentum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli ETFs and Vanguard Momentum.
Diversification Opportunities for Gabelli ETFs and Vanguard Momentum
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gabelli and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli ETFs Trust and Vanguard Momentum Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Momentum Factor and Gabelli ETFs 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 ETFs Trust are associated (or correlated) with Vanguard Momentum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Momentum Factor has no effect on the direction of Gabelli ETFs i.e., Gabelli ETFs and Vanguard Momentum go up and down completely randomly.
Pair Corralation between Gabelli ETFs and Vanguard Momentum
Given the investment horizon of 90 days Gabelli ETFs Trust is expected to generate 0.68 times more return on investment than Vanguard Momentum. However, Gabelli ETFs Trust is 1.47 times less risky than Vanguard Momentum. It trades about 0.21 of its potential returns per unit of risk. Vanguard Momentum Factor is currently generating about -0.01 per unit of risk. If you would invest 2,875 in Gabelli ETFs Trust on September 13, 2024 and sell it today you would earn a total of 78.00 from holding Gabelli ETFs Trust or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli ETFs Trust vs. Vanguard Momentum Factor
Performance |
| Timeline |
| Gabelli ETFs Trust |
| Vanguard Momentum Factor |
Gabelli ETFs and Vanguard Momentum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli ETFs and Vanguard Momentum
The main advantage of trading using opposite Gabelli ETFs and Vanguard Momentum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli ETFs position performs unexpectedly, Vanguard Momentum 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 Vanguard Momentum will offset losses from the drop in Vanguard Momentum's long position.| Gabelli ETFs vs. Vanguard Momentum Factor | Gabelli ETFs vs. Vanguard Multifactor | Gabelli ETFs vs. Vanguard Value Factor | Gabelli ETFs vs. Vanguard Minimum Volatility |
| Vanguard Momentum vs. Vanguard Quality Factor | Vanguard Momentum vs. Vanguard Multifactor | Vanguard Momentum vs. Vanguard Value Factor | Vanguard Momentum vs. Vanguard Minimum Volatility |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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