Correlation Between Gabelli Multimedia and Voya Asia

Can any of the company-specific risk be diversified away by investing in both Gabelli Multimedia 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 Multimedia 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 Multimedia and Voya Asia Pacific, you can compare the effects of market volatilities on Gabelli Multimedia 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 Multimedia with a short position of Voya Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Multimedia and Voya Asia.

Diversification Opportunities for Gabelli Multimedia and Voya Asia

0.65

Correlation Coefficient

Gabelli Multimedia  Voya Asia

Poor diversification

The 3 months correlation between Gabelli and Voya is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Multimedia 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 Multimedia 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 Multimedia 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 Multimedia i.e., Gabelli Multimedia and Voya Asia go up and down completely randomly.

Pair Corralation between Gabelli Multimedia and Voya Asia

Assuming the 90 days trading horizon The Gabelli Multimedia is expected to generate 0.67 times more return on investment than Voya Asia. However, The Gabelli Multimedia is 1.5 times less risky than Voya Asia. It trades about 0.1 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  2,230  in The Gabelli Multimedia on September 1, 2024 and sell it today you would earn a total of  103.00  from holding The Gabelli Multimedia or generate 4.62% return on investment over 90 days.

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

The Gabelli Multimedia  vs.  Voya Asia Pacific

The Gabelli Multimedia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Multimedia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Gabelli Multimedia is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Multimedia and Voya Asia

The main advantage of trading using opposite Gabelli Multimedia and Voya Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Multimedia 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 Multimedia 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.