Correlation Between Gabelli Equity and Voya Asia

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

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

Diversification Opportunities for Gabelli Equity and Voya Asia

0.52

Correlation Coefficient

Gabelli Equity  Voya Asia

Very weak diversification

The 3 months correlation between Gabelli and Voya is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Voya Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Asia Pacific and Gabelli Equity 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 The Gabelli Equity are associated (or correlated) with Voya Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Asia Pacific has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Voya Asia go up and down completely randomly.

Pair Corralation between Gabelli Equity and Voya Asia

Assuming the 90 days trading horizon The Gabelli Equity is expected to generate 0.52 times more return on investment than Voya Asia. However, The Gabelli Equity is 1.92 times less risky than Voya Asia. It trades about 0.15 of its potential returns per unit of risk. Voya Asia Pacific is currently generating about 0.0 per unit of risk. If you would invest  2,188  in The Gabelli Equity on September 1, 2024 and sell it today you would earn a total of  131.00  from holding The Gabelli Equity or generate 5.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

The Gabelli Equity  vs.  Voya Asia Pacific

Gabelli Equity

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Equity are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, Gabelli Equity is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Voya Asia Pacific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Asia Pacific has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Voya Asia is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gabelli Equity and Voya Asia

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

The idea behind The Gabelli Equity and Voya Asia Pacific 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.