Correlation Between Gabelli Equity and Ameritrans Capital

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

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

Diversification Opportunities for Gabelli Equity and Ameritrans Capital

0.0

Correlation Coefficient

Gabelli Equity  Ameritrans Capital

Pay attention - limited upside

The 3 months correlation between Gabelli and Ameritrans is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Ameritrans Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameritrans Capital Corp and Gabelli Equity 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 Equity are associated (or correlated) with Ameritrans Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameritrans Capital Corp has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Ameritrans Capital go up and down completely randomly.

Pair Corralation between Gabelli Equity and Ameritrans Capital

If you would invest  2,271  in The Gabelli Equity on July 11, 2024 and sell it today you would earn a total of  114.00  from holding The Gabelli Equity or generate 5.02% return on investment over 90 days.

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

The Gabelli Equity  vs.  Ameritrans Capital Corp

Gabelli Equity

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Gabelli Equity are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental drivers, Gabelli Equity reported solid returns over the last few months and may actually be approaching a breakup point.

Ameritrans Capital Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ameritrans Capital Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Ameritrans Capital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Gabelli Equity and Ameritrans Capital

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

The idea behind The Gabelli Equity and Ameritrans Capital Corp 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.