Correlation Between Gabelli Gold and Prudential Jennison

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Can any of the company-specific risk be diversified away by investing in both Gabelli Gold and Prudential Jennison 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 Gold and Prudential Jennison into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Gold Fund and Prudential Jennison Global, you can compare the effects of market volatilities on Gabelli Gold and Prudential Jennison 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 Gold with a short position of Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Gold and Prudential Jennison.

Diversification Opportunities for Gabelli Gold and Prudential Jennison

0.03
  Correlation Coefficient

Significant diversification

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

Pair Corralation between Gabelli Gold and Prudential Jennison

Assuming the 90 days horizon Gabelli Gold Fund is expected to under-perform the Prudential Jennison. In addition to that, Gabelli Gold is 2.21 times more volatile than Prudential Jennison Global. It trades about -0.02 of its total potential returns per unit of risk. Prudential Jennison Global is currently generating about 0.02 per unit of volatility. If you would invest  1,698  in Prudential Jennison Global on September 13, 2024 and sell it today you would earn a total of  13.00  from holding Prudential Jennison Global or generate 0.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gabelli Gold Fund  vs.  Prudential Jennison Global

 Performance 
       Timeline  
Gabelli Gold 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gabelli Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Gabelli Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Prudential Jennison 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Jennison Global are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential Jennison is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Gold and Prudential Jennison Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gabelli Gold and Prudential Jennison

The main advantage of trading using opposite Gabelli Gold and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Gold position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.
The idea behind Gabelli Gold Fund and Prudential Jennison Global 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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