Correlation Between First Investors and Gabelli Convertible
Can any of the company-specific risk be diversified away by investing in both First Investors and Gabelli Convertible 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 Investors and Gabelli Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Investors Growth and Gabelli Convertible And, you can compare the effects of market volatilities on First Investors and Gabelli Convertible 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 Investors with a short position of Gabelli Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Investors and Gabelli Convertible.
Diversification Opportunities for First Investors and Gabelli Convertible
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between First and Gabelli is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding First Investors Growth and Gabelli Convertible And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Convertible And and First Investors 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 Investors Growth are associated (or correlated) with Gabelli Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Convertible And has no effect on the direction of First Investors i.e., First Investors and Gabelli Convertible go up and down completely randomly.
Pair Corralation between First Investors and Gabelli Convertible
Assuming the 90 days horizon First Investors Growth is expected to generate 0.63 times more return on investment than Gabelli Convertible. However, First Investors Growth is 1.59 times less risky than Gabelli Convertible. It trades about 0.29 of its potential returns per unit of risk. Gabelli Convertible And is currently generating about 0.05 per unit of risk. If you would invest 1,450 in First Investors Growth on November 30, 2024 and sell it today you would earn a total of 109.00 from holding First Investors Growth or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Investors Growth vs. Gabelli Convertible And
Performance |
| Timeline |
| First Investors Growth |
| Gabelli Convertible And |
First Investors and Gabelli Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Investors and Gabelli Convertible
The main advantage of trading using opposite First Investors and Gabelli Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Investors position performs unexpectedly, Gabelli Convertible 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 Convertible will offset losses from the drop in Gabelli Convertible's long position.| First Investors vs. Ab Bond Inflation | First Investors vs. Tiaa Cref Inflation Linked Bond | First Investors vs. Aqr Managed Futures | First Investors vs. The Hartford Inflation |
| Gabelli Convertible vs. Gabelli Global Small | Gabelli Convertible vs. MFS Investment Grade | Gabelli Convertible vs. Eaton Vance National | Gabelli Convertible vs. GAMCO Natural Resources |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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