Correlation Between Eventide Large and Gabelli Money

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

By analyzing existing cross correlation between Eventide Large Cap and The Gabelli Money, you can compare the effects of market volatilities on Eventide Large and Gabelli Money 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 Eventide Large with a short position of Gabelli Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventide Large and Gabelli Money.

Diversification Opportunities for Eventide Large and Gabelli Money

0.03

Correlation Coefficient

Eventide Large  Gabelli Money

Significant diversification

The 3 months correlation between Eventide and Gabelli is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Eventide Large Cap and The Gabelli Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Money and Eventide Large 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 Eventide Large Cap are associated (or correlated) with Gabelli Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Money has no effect on the direction of Eventide Large i.e., Eventide Large and Gabelli Money go up and down completely randomly.

Pair Corralation between Eventide Large and Gabelli Money

Assuming the 90 days horizon Eventide Large Cap is expected to under-perform the Gabelli Money. In addition to that, Eventide Large is 7.17 times more volatile than The Gabelli Money. It trades about -0.11 of its total potential returns per unit of risk. The Gabelli Money is currently generating about 0.12 per unit of volatility. If you would invest  99.00  in The Gabelli Money on September 24, 2024 and sell it today you would earn a total of  1.00  from holding The Gabelli Money or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Eventide Large Cap  vs.  The Gabelli Money

Eventide Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eventide Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Eventide Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Money

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Money are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gabelli Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eventide Large and Gabelli Money

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

The idea behind Eventide Large Cap and The Gabelli Money 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.