Correlation Between Gabelli ETFs and Vanguard Extended
Can any of the company-specific risk be diversified away by investing in both Gabelli ETFs and Vanguard Extended 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 Extended 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 Extended Market, you can compare the effects of market volatilities on Gabelli ETFs and Vanguard Extended 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 Extended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli ETFs and Vanguard Extended.
Diversification Opportunities for Gabelli ETFs and Vanguard Extended
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gabelli and Vanguard is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli ETFs Trust and Vanguard Extended Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Extended Market 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 Extended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Extended Market has no effect on the direction of Gabelli ETFs i.e., Gabelli ETFs and Vanguard Extended go up and down completely randomly.
Pair Corralation between Gabelli ETFs and Vanguard Extended
Given the investment horizon of 90 days Gabelli ETFs is expected to generate 2.17 times less return on investment than Vanguard Extended. But when comparing it to its historical volatility, Gabelli ETFs Trust is 1.23 times less risky than Vanguard Extended. It trades about 0.05 of its potential returns per unit of risk. Vanguard Extended Market is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13,268 in Vanguard Extended Market on August 30, 2024 and sell it today you would earn a total of 7,186 from holding Vanguard Extended Market or generate 54.16% 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 Extended Market
Performance |
| Timeline |
| Gabelli ETFs Trust |
| Vanguard Extended Market |
Gabelli ETFs and Vanguard Extended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli ETFs and Vanguard Extended
The main advantage of trading using opposite Gabelli ETFs and Vanguard Extended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli ETFs position performs unexpectedly, Vanguard Extended 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 Extended will offset losses from the drop in Vanguard Extended's long position.| Gabelli ETFs vs. Freedom Day Dividend | Gabelli ETFs vs. Franklin Templeton ETF | Gabelli ETFs vs. iShares MSCI China | Gabelli ETFs vs. Tidal Trust II |
| Vanguard Extended vs. Vanguard Large Cap Index | Vanguard Extended vs. Vanguard Small Cap Growth | Vanguard Extended vs. Vanguard Mid Cap Index | Vanguard Extended vs. Vanguard Mid Cap Growth |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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