Correlation Between Nuveen California and Gabelli Global

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

By analyzing existing cross correlation between Nuveen California Dividend and Gabelli Global Small, you can compare the effects of market volatilities on Nuveen California and Gabelli 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 Nuveen California with a short position of Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Gabelli Global.

Diversification Opportunities for Nuveen California and Gabelli Global

0.67

Correlation Coefficient

Nuveen California  Gabelli Global

Poor diversification

The 3 months correlation between Nuveen and Gabelli is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Dividend and Gabelli Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Small and Nuveen California 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 Nuveen California Dividend are associated (or correlated) with Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Small has no effect on the direction of Nuveen California i.e., Nuveen California and Gabelli Global go up and down completely randomly.

Pair Corralation between Nuveen California and Gabelli Global

Considering the 90-day investment horizon Nuveen California Dividend is expected to under-perform the Gabelli Global. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen California Dividend is 1.65 times less risky than Gabelli Global. The fund trades about -0.01 of its potential returns per unit of risk. The Gabelli Global Small is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,144  in Gabelli Global Small on February 26, 2024 and sell it today you would earn a total of  28.00  from holding Gabelli Global Small or generate 2.45% return on investment over 90 days.

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

Nuveen California Dividend  vs.  Gabelli Global Small

Nuveen California

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen California Dividend are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound basic indicators, Nuveen California is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Gabelli Global Small

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Small are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Gabelli Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen California and Gabelli Global

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

The idea behind Nuveen California Dividend and Gabelli Global Small 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.