Correlation Between First Trust and Gabelli Equity
Can any of the company-specific risk be diversified away by investing in both First Trust and Gabelli Equity 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 First Trust and Gabelli Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Senior and The Gabelli Equity, you can compare the effects of market volatilities on First Trust and Gabelli Equity 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 First Trust with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Gabelli Equity.
Diversification Opportunities for First Trust and Gabelli Equity
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between First and Gabelli is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Senior and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and First Trust 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 First Trust Senior are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of First Trust i.e., First Trust and Gabelli Equity go up and down completely randomly.
Pair Corralation between First Trust and Gabelli Equity
Considering the 90-day investment horizon First Trust Senior is expected to generate 1.23 times more return on investment than Gabelli Equity. However, First Trust is 1.23 times more volatile than The Gabelli Equity. It trades about 0.16 of its potential returns per unit of risk. The Gabelli Equity is currently generating about -0.19 per unit of risk. If you would invest 1,027 in First Trust Senior on September 1, 2024 and sell it today you would earn a total of 17.00 from holding First Trust Senior or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Trust Senior vs. The Gabelli Equity
Performance |
| Timeline |
| First Trust Senior |
| Gabelli Equity |
First Trust and Gabelli Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Gabelli Equity
The main advantage of trading using opposite First Trust and Gabelli Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Gabelli Equity 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 Gabelli Equity will offset losses from the drop in Gabelli Equity's long position.| First Trust vs. Blackstone Gso Long | First Trust vs. Eaton Vance Senior | First Trust vs. Western Asset Global | First Trust vs. Western Asset Global |
| Gabelli Equity vs. Virtus AllianzGI Convertible | Gabelli Equity vs. The Gabelli Equity | Gabelli Equity vs. Oxford Lane Capital | Gabelli Equity vs. The Gabelli Utility |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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