Correlation Between Gabelli Equity and First Trust
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and First Trust 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 Gabelli Equity and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Equity and First Trust Senior, you can compare the effects of market volatilities on Gabelli Equity and First Trust 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 Gabelli Equity with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and First Trust.
Diversification Opportunities for Gabelli Equity and First Trust
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gabelli and First is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and First Trust Senior in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Senior and Gabelli Equity 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 The Gabelli Equity are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Senior has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and First Trust go up and down completely randomly.
Pair Corralation between Gabelli Equity and First Trust
Assuming the 90 days trading horizon The Gabelli Equity is expected to generate 1.18 times more return on investment than First Trust. However, Gabelli Equity is 1.18 times more volatile than First Trust Senior. It trades about 0.15 of its potential returns per unit of risk. First Trust Senior is currently generating about 0.09 per unit of risk. If you would invest 2,181 in The Gabelli Equity on August 29, 2024 and sell it today you would earn a total of 132.00 from holding The Gabelli Equity or generate 6.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Equity vs. First Trust Senior
Performance |
| Timeline |
| Gabelli Equity |
| First Trust Senior |
Gabelli Equity and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and First Trust
The main advantage of trading using opposite Gabelli Equity and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Gabelli Equity vs. Virtus AllianzGI Convertible | Gabelli Equity vs. The Gabelli Equity | Gabelli Equity vs. Oxford Lane Capital | Gabelli Equity vs. The Gabelli Utility |
| First Trust vs. Eaton Vance National | First Trust vs. Invesco High Income | First Trust vs. Blackrock Muniholdings Ny | First Trust vs. Nuveen California Select |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |