Correlation Between First Horizon and Gabelli Equity

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

By analyzing existing cross correlation between First Horizon National and Gabelli Equity Trust, you can compare the effects of market volatilities on First Horizon and Gabelli Equity 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 First Horizon with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Horizon and Gabelli Equity.

Diversification Opportunities for First Horizon and Gabelli Equity

0.69

Correlation Coefficient

First Horizon  Gabelli Equity

Poor diversification

The 3 months correlation between First and Gabelli is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding First Horizon National and Gabelli Equity Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity Trust and First Horizon 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 First Horizon National are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity Trust has no effect on the direction of First Horizon i.e., First Horizon and Gabelli Equity go up and down completely randomly.

Pair Corralation between First Horizon and Gabelli Equity

Considering the 90-day investment horizon First Horizon National is expected to generate 2.0 times more return on investment than Gabelli Equity. However, First Horizon is 2.0 times more volatile than Gabelli Equity Trust. It trades about 0.11 of its potential returns per unit of risk. Gabelli Equity Trust is currently generating about 0.08 per unit of risk. If you would invest  1,084  in First Horizon National on January 16, 2024 and sell it today you would earn a total of  319.00  from holding First Horizon National or generate 29.43% return on investment over 90 days.

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

First Horizon National  vs.  Gabelli Equity Trust

First Horizon National

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in First Horizon National are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, First Horizon may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Gabelli Equity Trust

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Equity Trust are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, Gabelli Equity may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with First Horizon and Gabelli Equity

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

The idea behind First Horizon National and Gabelli Equity Trust 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.