Correlation Between Gabelli Value and Wilmington Global

Can any of the company-specific risk be diversified away by investing in both Gabelli Value and Wilmington Global 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 Wilmington Global 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 Wilmington Global Alpha, you can compare the effects of market volatilities on Gabelli Value and Wilmington Global 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 Wilmington Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Value and Wilmington Global.

Diversification Opportunities for Gabelli Value and Wilmington Global

0.91

Correlation Coefficient

Gabelli Value  Wilmington Global

Almost no diversification

The 3 months correlation between Gabelli and Wilmington is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Value and Wilmington Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Global Alpha 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 Wilmington Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Global Alpha has no effect on the direction of Gabelli Value i.e., Gabelli Value and Wilmington Global go up and down completely randomly.

Pair Corralation between Gabelli Value and Wilmington Global

Assuming the 90 days horizon The Gabelli Value is expected to generate 2.65 times more return on investment than Wilmington Global. However, Gabelli Value is 2.65 times more volatile than Wilmington Global Alpha. It trades about 0.15 of its potential returns per unit of risk. Wilmington Global Alpha is currently generating about 0.07 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 Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

The Gabelli Value  vs.  Wilmington Global Alpha

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.

Wilmington Global Alpha

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wilmington Global Alpha are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Wilmington Global 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 Wilmington Global

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

The idea behind The Gabelli Value and Wilmington Global Alpha 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.