Correlation Between Gabelli Equity and Western Asset
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and Western Asset 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 Western Asset 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 Western Asset Global, you can compare the effects of market volatilities on Gabelli Equity and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and Western Asset.
Diversification Opportunities for Gabelli Equity and Western Asset
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gabelli and Western is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Equity Trust and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Western Asset go up and down completely randomly.
Pair Corralation between Gabelli Equity and Western Asset
Considering the 90-day investment horizon Gabelli Equity Trust is expected to generate 1.11 times more return on investment than Western Asset. However, Gabelli Equity is 1.11 times more volatile than Western Asset Global. It trades about 0.36 of its potential returns per unit of risk. Western Asset Global is currently generating about -0.1 per unit of risk. If you would invest 541.00 in Gabelli Equity Trust on August 28, 2024 and sell it today you would earn a total of 36.00 from holding Gabelli Equity Trust or generate 6.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Equity Trust vs. Western Asset Global
Performance |
| Timeline |
| Gabelli Equity Trust |
| Western Asset Global |
Gabelli Equity and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and Western Asset
The main advantage of trading using opposite Gabelli Equity and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Western Asset High | Western Asset vs. BNY Mellon High | Western Asset vs. Allspring Income Opportunities | Western Asset vs. Allianzgi Convertible Income |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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