Correlation Between Gabelli Equity and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and OFS Credit 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 OFS Credit 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 OFS Credit, you can compare the effects of market volatilities on Gabelli Equity and OFS Credit 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 OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and OFS Credit.
Diversification Opportunities for Gabelli Equity and OFS Credit
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gabelli and OFS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit 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 OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and OFS Credit go up and down completely randomly.
Pair Corralation between Gabelli Equity and OFS Credit
Assuming the 90 days trading horizon Gabelli Equity is expected to generate 1.47 times less return on investment than OFS Credit. In addition to that, Gabelli Equity is 1.03 times more volatile than OFS Credit. It trades about 0.05 of its total potential returns per unit of risk. OFS Credit is currently generating about 0.07 per unit of volatility. If you would invest 2,110 in OFS Credit on August 31, 2024 and sell it today you would earn a total of 368.00 from holding OFS Credit or generate 17.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Equity vs. OFS Credit
Performance |
| Timeline |
| Gabelli Equity |
| OFS Credit |
Gabelli Equity and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and OFS Credit
The main advantage of trading using opposite Gabelli Equity and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, OFS Credit 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 OFS Credit will offset losses from the drop in OFS Credit'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 |
| OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Equity | OFS Credit vs. The Gabelli Utility | OFS Credit vs. Bancroft Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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