Correlation Between Gabelli Gold and Nuveen California

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Can any of the company-specific risk be diversified away by investing in both Gabelli Gold and Nuveen California 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 Gold and Nuveen California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Gold Fund and Nuveen California High, you can compare the effects of market volatilities on Gabelli Gold and Nuveen California 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 Gold with a short position of Nuveen California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Gold and Nuveen California.

Diversification Opportunities for Gabelli Gold and Nuveen California

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Gabelli and Nuveen is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Nuveen California High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California High and Gabelli Gold 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 Gabelli Gold Fund are associated (or correlated) with Nuveen California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen California High has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Nuveen California go up and down completely randomly.

Pair Corralation between Gabelli Gold and Nuveen California

Assuming the 90 days horizon Gabelli Gold Fund is expected to generate 10.83 times more return on investment than Nuveen California. However, Gabelli Gold is 10.83 times more volatile than Nuveen California High. It trades about 0.17 of its potential returns per unit of risk. Nuveen California High is currently generating about 0.4 per unit of risk. If you would invest  3,833  in Gabelli Gold Fund on September 1, 2025 and sell it today you would earn a total of  1,097  from holding Gabelli Gold Fund or generate 28.62% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy98.44%
ValuesDaily Returns

Gabelli Gold Fund  vs.  Nuveen California High

 Performance 
       Timeline  
Gabelli Gold 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Gold Fund are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gabelli Gold showed solid returns over the last few months and may actually be approaching a breakup point.
Nuveen California High 

Risk-Adjusted Performance

High

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen California High are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen California is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gabelli Gold and Nuveen California Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Gabelli Gold and Nuveen California

The main advantage of trading using opposite Gabelli Gold and Nuveen California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Gold position performs unexpectedly, Nuveen California 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 Nuveen California will offset losses from the drop in Nuveen California's long position.
The idea behind Gabelli Gold Fund and Nuveen California High 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.

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