Correlation Between Cornerstone Strategic and Gabelli MultiMedia

Can any of the company-specific risk be diversified away by investing in both Cornerstone Strategic and Gabelli MultiMedia 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 Cornerstone Strategic and Gabelli MultiMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cornerstone Strategic Return and Gabelli MultiMedia Mutual, you can compare the effects of market volatilities on Cornerstone Strategic and Gabelli MultiMedia 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 Cornerstone Strategic with a short position of Gabelli MultiMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornerstone Strategic and Gabelli MultiMedia.

Diversification Opportunities for Cornerstone Strategic and Gabelli MultiMedia

0.43

Correlation Coefficient

Cornerstone Strategic  Gabelli MultiMedia

Very weak diversification

The 3 months correlation between Cornerstone and Gabelli is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Return and Gabelli MultiMedia Mutual in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli MultiMedia Mutual and Cornerstone Strategic 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 Cornerstone Strategic Return are associated (or correlated) with Gabelli MultiMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli MultiMedia Mutual has no effect on the direction of Cornerstone Strategic i.e., Cornerstone Strategic and Gabelli MultiMedia go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Gabelli MultiMedia

Considering the 90-day investment horizon Cornerstone Strategic Return is expected to under-perform the Gabelli MultiMedia. In addition to that, Cornerstone Strategic is 1.9 times more volatile than Gabelli MultiMedia Mutual. It trades about -0.07 of its total potential returns per unit of risk. Gabelli MultiMedia Mutual is currently generating about -0.11 per unit of volatility. If you would invest  474.00  in Gabelli MultiMedia Mutual on September 28, 2024 and sell it today you would lose (16.00) from holding Gabelli MultiMedia Mutual or give up 3.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Cornerstone Strategic Return  vs.  Gabelli MultiMedia Mutual

Cornerstone Strategic

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Return are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly uncertain basic indicators, Cornerstone Strategic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gabelli MultiMedia Mutual

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli MultiMedia Mutual has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Gabelli MultiMedia is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Cornerstone Strategic and Gabelli MultiMedia

The main advantage of trading using opposite Cornerstone Strategic and Gabelli MultiMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic position performs unexpectedly, Gabelli MultiMedia 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 MultiMedia will offset losses from the drop in Gabelli MultiMedia's long position.

The idea behind Cornerstone Strategic Return and Gabelli MultiMedia Mutual pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.