Correlation Between Gabelli Value and Guidepath Managed

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

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

Diversification Opportunities for Gabelli Value and Guidepath Managed

-0.3

Correlation Coefficient

Gabelli Value  Guidepath Managed

Very good diversification

The 3 months correlation between Gabelli and Guidepath is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Value and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures and Gabelli Value 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 Value are associated (or correlated) with Guidepath Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Gabelli Value i.e., Gabelli Value and Guidepath Managed go up and down completely randomly.

Pair Corralation between Gabelli Value and Guidepath Managed

Assuming the 90 days horizon The Gabelli Value is expected to generate 1.26 times more return on investment than Guidepath Managed. However, Gabelli Value is 1.26 times more volatile than Guidepath Managed Futures. It trades about 0.15 of its potential returns per unit of risk. Guidepath Managed Futures is currently generating about -0.05 per unit of risk. If you would invest  1,041  in The Gabelli Value on September 13, 2024 and sell it today you would earn a total of  70.00  from holding The Gabelli Value or generate 6.72% return on investment over 90 days.

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

The Gabelli Value  vs.  Guidepath Managed Futures

Gabelli Value

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Value are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gabelli Value may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Guidepath Managed Futures

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gabelli Value and Guidepath Managed

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

The idea behind The Gabelli Value and Guidepath Managed Futures 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.