Correlation Between Gabelli Equity and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and MFS Investment 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 MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Equity Trust and MFS Investment Grade, you can compare the effects of market volatilities on Gabelli Equity and MFS Investment 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 MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and MFS Investment.
Diversification Opportunities for Gabelli Equity and MFS Investment
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gabelli and MFS is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade 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 Gabelli Equity Trust are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and MFS Investment go up and down completely randomly.
Pair Corralation between Gabelli Equity and MFS Investment
Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 1.92 times more return on investment than MFS Investment. However, Gabelli Equity is 1.92 times more volatile than MFS Investment Grade. It trades about 0.14 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.06 per unit of risk. If you would invest 538.00 in Gabelli Equity Trust on August 28, 2024 and sell it today you would earn a total of 39.00 from holding Gabelli Equity Trust or generate 7.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Equity Trust vs. MFS Investment Grade
Performance |
| Timeline |
| Gabelli Equity Trust |
| MFS Investment Grade |
Gabelli Equity and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and MFS Investment
The main advantage of trading using opposite Gabelli Equity and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment's long position.| Gabelli Equity vs. Gabelli Utility Closed | Gabelli Equity vs. Gabelli MultiMedia Mutual | Gabelli Equity vs. Gabelli Healthcare WellnessRx | Gabelli Equity vs. Liberty All Star |
| MFS Investment vs. Aurora Innovation | MFS Investment vs. HUMANA INC | MFS Investment vs. Aquagold International | MFS Investment vs. Barloworld Ltd ADR |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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