Correlation Between Gabelli Gold and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Gabelli Gold and Prudential Jennison 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 Prudential Jennison 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 Prudential Jennison Equity, you can compare the effects of market volatilities on Gabelli Gold and Prudential Jennison 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Gold and Prudential Jennison.
Diversification Opportunities for Gabelli Gold and Prudential Jennison
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gabelli and Prudential is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Prudential Jennison Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Prudential Jennison go up and down completely randomly.
Pair Corralation between Gabelli Gold and Prudential Jennison
Assuming the 90 days horizon Gabelli Gold Fund is expected to generate 3.03 times more return on investment than Prudential Jennison. However, Gabelli Gold is 3.03 times more volatile than Prudential Jennison Equity. It trades about 0.16 of its potential returns per unit of risk. Prudential Jennison Equity is currently generating about 0.13 per unit of risk. If you would invest 3,200 in Gabelli Gold Fund on June 6, 2025 and sell it today you would earn a total of 512.00 from holding Gabelli Gold Fund or generate 16.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.36% |
| Values | Daily Returns |
Gabelli Gold Fund vs. Prudential Jennison Equity
Performance |
| Timeline |
| Gabelli Gold |
| Prudential Jennison |
Gabelli Gold and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Gold and Prudential Jennison
The main advantage of trading using opposite Gabelli Gold and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Gold position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Gabelli Gold vs. Enhanced Fixed Income | Gabelli Gold vs. Goldman Sachs Equity | Gabelli Gold vs. Gmo Global Equity | Gabelli Gold vs. Us Vector Equity |
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Check out your portfolio center.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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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