Correlation Between Federated Mortgage and Gabelli Global
Can any of the company-specific risk be diversified away by investing in both Federated Mortgage and Gabelli Global 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 Federated Mortgage and Gabelli Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Mortgage Fund and Gabelli Global Financial, you can compare the effects of market volatilities on Federated Mortgage and Gabelli Global 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 Federated Mortgage with a short position of Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Mortgage and Gabelli Global.
Diversification Opportunities for Federated Mortgage and Gabelli Global
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Federated and Gabelli is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Federated Mortgage Fund and Gabelli Global Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Financial and Federated Mortgage 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 Federated Mortgage Fund are associated (or correlated) with Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Financial has no effect on the direction of Federated Mortgage i.e., Federated Mortgage and Gabelli Global go up and down completely randomly.
Pair Corralation between Federated Mortgage and Gabelli Global
Assuming the 90 days horizon Federated Mortgage Fund is expected to generate 0.39 times more return on investment than Gabelli Global. However, Federated Mortgage Fund is 2.57 times less risky than Gabelli Global. It trades about 0.23 of its potential returns per unit of risk. Gabelli Global Financial is currently generating about -0.04 per unit of risk. If you would invest 815.00 in Federated Mortgage Fund on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Federated Mortgage Fund or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Mortgage Fund vs. Gabelli Global Financial
Performance |
| Timeline |
| Federated Mortgage |
| Gabelli Global Financial |
Federated Mortgage and Gabelli Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Mortgage and Gabelli Global
The main advantage of trading using opposite Federated Mortgage and Gabelli Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Mortgage position performs unexpectedly, Gabelli Global 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 Global will offset losses from the drop in Gabelli Global's long position.| Federated Mortgage vs. Federated Emerging Market | Federated Mortgage vs. Federated Mdt All | Federated Mortgage vs. Federated Mdt Balanced | Federated Mortgage vs. Federated Global Allocation |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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