Correlation Between Ellsworth Convertible and RENN Fund
Can any of the company-specific risk be diversified away by investing in both Ellsworth Convertible and RENN Fund 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 RENN Fund 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 RENN Fund, you can compare the effects of market volatilities on Ellsworth Convertible and RENN Fund 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 RENN Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ellsworth Convertible and RENN Fund.
Diversification Opportunities for Ellsworth Convertible and RENN Fund
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ellsworth and RENN is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ellsworth Convertible Growth and RENN Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENN Fund 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 RENN Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENN Fund has no effect on the direction of Ellsworth Convertible i.e., Ellsworth Convertible and RENN Fund go up and down completely randomly.
Pair Corralation between Ellsworth Convertible and RENN Fund
Considering the 90-day investment horizon Ellsworth Convertible is expected to generate 1.46 times less return on investment than RENN Fund. But when comparing it to its historical volatility, Ellsworth Convertible Growth is 2.14 times less risky than RENN Fund. It trades about 0.06 of its potential returns per unit of risk. RENN Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 198.00 in RENN Fund on August 26, 2024 and sell it today you would earn a total of 72.00 from holding RENN Fund or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ellsworth Convertible Growth vs. RENN Fund
Performance |
| Timeline |
| Ellsworth Convertible |
| RENN Fund |
Ellsworth Convertible and RENN Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ellsworth Convertible and RENN Fund
The main advantage of trading using opposite Ellsworth Convertible and RENN Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellsworth Convertible position performs unexpectedly, RENN Fund 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 RENN Fund will offset losses from the drop in RENN Fund'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 |
| RENN Fund vs. Ellsworth Convertible Growth | RENN Fund vs. Delaware Investments Florida | RENN Fund vs. Nuveen New Jersey | RENN Fund vs. John Hancock Hedged |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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