Correlation Between Value Line and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Value Line and The Gabelli 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 Value Line and The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Line Income and The Gabelli Equity, you can compare the effects of market volatilities on Value Line and The Gabelli 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 Value Line with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Line and The Gabelli.
Diversification Opportunities for Value Line and The Gabelli
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Value and The is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Value Line Income and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and Value Line 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 Value Line Income are associated (or correlated) with The Gabelli. 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 Value Line i.e., Value Line and The Gabelli go up and down completely randomly.
Pair Corralation between Value Line and The Gabelli
Assuming the 90 days horizon Value Line Income is expected to generate 0.98 times more return on investment than The Gabelli. However, Value Line Income is 1.02 times less risky than The Gabelli. It trades about 0.23 of its potential returns per unit of risk. The Gabelli Equity is currently generating about 0.16 per unit of risk. If you would invest 1,240 in Value Line Income on August 31, 2024 and sell it today you would earn a total of 59.00 from holding Value Line Income or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Line Income vs. The Gabelli Equity
Performance |
| Timeline |
| Value Line Income |
| Gabelli Equity |
Value Line and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Line and The Gabelli
The main advantage of trading using opposite Value Line and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Line position performs unexpectedly, The Gabelli 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 The Gabelli will offset losses from the drop in The Gabelli's long position.| Value Line vs. American Funds American | Value Line vs. American Funds American | Value Line vs. American Balanced | Value Line vs. American Balanced Fund |
| The Gabelli vs. Aquagold International | The Gabelli vs. Morningstar Unconstrained Allocation | The Gabelli vs. Thrivent High Yield | The Gabelli vs. Via Renewables |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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