Correlation Between Federated Total and Gabelli Convertible
Can any of the company-specific risk be diversified away by investing in both Federated Total 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 Federated Total and Gabelli Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Total Return and Gabelli Convertible And, you can compare the effects of market volatilities on Federated Total 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 Federated Total with a short position of Gabelli Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Total and Gabelli Convertible.
Diversification Opportunities for Federated Total and Gabelli Convertible
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Federated and Gabelli is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Federated Total Return 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 Federated Total 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 Total Return 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 Federated Total i.e., Federated Total and Gabelli Convertible go up and down completely randomly.
Pair Corralation between Federated Total and Gabelli Convertible
Assuming the 90 days horizon Federated Total is expected to generate 21.66 times less return on investment than Gabelli Convertible. But when comparing it to its historical volatility, Federated Total Return is 2.92 times less risky than Gabelli Convertible. It trades about 0.06 of its potential returns per unit of risk. Gabelli Convertible And is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 372.00 in Gabelli Convertible And on September 5, 2024 and sell it today you would earn a total of 36.00 from holding Gabelli Convertible And or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Total Return vs. Gabelli Convertible And
Performance |
| Timeline |
| Federated Total Return |
| Gabelli Convertible And |
Federated Total and Gabelli Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Total and Gabelli Convertible
The main advantage of trading using opposite Federated Total and Gabelli Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Total 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.| Federated Total vs. Federated Emerging Market | Federated Total vs. Federated Mdt All | Federated Total vs. Federated Mdt Balanced | Federated Total vs. Federated Global Allocation |
| Gabelli Convertible vs. Calamos Global Dynamic | Gabelli Convertible vs. Calamos Strategic Total | Gabelli Convertible vs. Calamos Dynamic Convertible | Gabelli Convertible vs. Calamos LongShort Equity |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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