Correlation Between Ellsworth Convertible and DTF Tax
Can any of the company-specific risk be diversified away by investing in both Ellsworth Convertible and DTF Tax 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 Ellsworth Convertible and DTF Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ellsworth Convertible Growth and DTF Tax Free, you can compare the effects of market volatilities on Ellsworth Convertible and DTF Tax 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 Ellsworth Convertible with a short position of DTF Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellsworth Convertible and DTF Tax.
Diversification Opportunities for Ellsworth Convertible and DTF Tax
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ellsworth and DTF is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ellsworth Convertible Growth and DTF Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DTF Tax Free and Ellsworth Convertible 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 Ellsworth Convertible Growth are associated (or correlated) with DTF Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DTF Tax Free has no effect on the direction of Ellsworth Convertible i.e., Ellsworth Convertible and DTF Tax go up and down completely randomly.
Pair Corralation between Ellsworth Convertible and DTF Tax
Considering the 90-day investment horizon Ellsworth Convertible is expected to generate 1.14 times less return on investment than DTF Tax. In addition to that, Ellsworth Convertible is 3.18 times more volatile than DTF Tax Free. It trades about 0.08 of its total potential returns per unit of risk. DTF Tax Free is currently generating about 0.29 per unit of volatility. If you would invest 1,113 in DTF Tax Free on November 9, 2024 and sell it today you would earn a total of 22.00 from holding DTF Tax Free or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellsworth Convertible Growth vs. DTF Tax Free
Performance |
| Timeline |
| Ellsworth Convertible |
| DTF Tax Free |
Ellsworth Convertible and DTF Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellsworth Convertible and DTF Tax
The main advantage of trading using opposite Ellsworth Convertible and DTF Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellsworth Convertible position performs unexpectedly, DTF Tax 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 DTF Tax will offset losses from the drop in DTF Tax's long position.| Ellsworth Convertible vs. Azimut Holding SpA | Ellsworth Convertible vs. Ameritrans Capital Corp | Ellsworth Convertible vs. Gdl Closed Fund | Ellsworth Convertible vs. Gabelli Global Small |
| DTF Tax vs. MFS Investment Grade | DTF Tax vs. Eaton Vance National | DTF Tax vs. MFS High Yield | DTF Tax vs. MFS Municipal Income |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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