Correlation Between Mid Cap and Gabelli Money

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

By analyzing existing cross correlation between Mid Cap 15x Strategy and The Gabelli Money, you can compare the effects of market volatilities on Mid Cap and Gabelli Money 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 Mid Cap with a short position of Gabelli Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mid Cap and Gabelli Money.

Diversification Opportunities for Mid Cap and Gabelli Money

0.21

Correlation Coefficient

Mid Cap  Gabelli Money

Modest diversification

The 3 months correlation between Mid and Gabelli is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mid Cap 15x Strategy and The Gabelli Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Money and Mid Cap 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 Mid Cap 15x Strategy are associated (or correlated) with Gabelli Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Money has no effect on the direction of Mid Cap i.e., Mid Cap and Gabelli Money go up and down completely randomly.

Pair Corralation between Mid Cap and Gabelli Money

Assuming the 90 days horizon Mid Cap 15x Strategy is expected to under-perform the Gabelli Money. In addition to that, Mid Cap is 12.24 times more volatile than The Gabelli Money. It trades about 0.0 of its total potential returns per unit of risk. The Gabelli Money is currently generating about 0.12 per unit of volatility. If you would invest  99.00  in The Gabelli Money on September 24, 2024 and sell it today you would earn a total of  1.00  from holding The Gabelli Money or generate 1.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Mid Cap 15x Strategy  vs.  The Gabelli Money

Mid Cap 15x

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mid Cap 15x Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Mid Cap is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Money

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Money are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gabelli Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mid Cap and Gabelli Money

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

The idea behind Mid Cap 15x Strategy and The Gabelli Money 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.