Correlation Between Red Oak and Gabelli Growth
Can any of the company-specific risk be diversified away by investing in both Red Oak and Gabelli Growth 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 Red Oak and Gabelli Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Red Oak Technology and The Gabelli Growth, you can compare the effects of market volatilities on Red Oak and Gabelli Growth 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 Red Oak with a short position of Gabelli Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and Gabelli Growth.
Diversification Opportunities for Red Oak and Gabelli Growth
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Red and Gabelli is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology and The Gabelli Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Growth and Red Oak 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 Red Oak Technology are associated (or correlated) with Gabelli Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Growth has no effect on the direction of Red Oak i.e., Red Oak and Gabelli Growth go up and down completely randomly.
Pair Corralation between Red Oak and Gabelli Growth
Assuming the 90 days horizon Red Oak is expected to generate 1.05 times less return on investment than Gabelli Growth. In addition to that, Red Oak is 1.02 times more volatile than The Gabelli Growth. It trades about 0.1 of its total potential returns per unit of risk. The Gabelli Growth is currently generating about 0.11 per unit of volatility. If you would invest 5,164 in The Gabelli Growth on August 30, 2024 and sell it today you would earn a total of 4,172 from holding The Gabelli Growth or generate 80.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Oak Technology vs. The Gabelli Growth
Performance |
| Timeline |
| Red Oak Technology |
| Gabelli Growth |
Red Oak and Gabelli Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Oak and Gabelli Growth
The main advantage of trading using opposite Red Oak and Gabelli Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red Oak position performs unexpectedly, Gabelli Growth 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 Growth will offset losses from the drop in Gabelli Growth's long position.| Red Oak vs. Live Oak Health | Red Oak vs. HUMANA INC | Red Oak vs. Aquagold International | Red Oak vs. Barloworld Ltd ADR |
| Gabelli Growth vs. Sprott Gold Equity | Gabelli Growth vs. Global Gold Fund | Gabelli Growth vs. Gamco Global Gold | Gabelli Growth vs. Franklin Gold Precious |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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