Correlation Between Gabelli Global and Western Asset
Can any of the company-specific risk be diversified away by investing in both Gabelli Global 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 Global 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 Global Financial and Western Asset Municipal, you can compare the effects of market volatilities on Gabelli Global 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 Global with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and Western Asset.
Diversification Opportunities for Gabelli Global and Western Asset
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gabelli and Western is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Financial and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Gabelli Global 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 Global Financial 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 Municipal has no effect on the direction of Gabelli Global i.e., Gabelli Global and Western Asset go up and down completely randomly.
Pair Corralation between Gabelli Global and Western Asset
Assuming the 90 days horizon Gabelli Global Financial is expected to generate 3.43 times more return on investment than Western Asset. However, Gabelli Global is 3.43 times more volatile than Western Asset Municipal. It trades about 0.12 of its potential returns per unit of risk. Western Asset Municipal is currently generating about 0.0 per unit of risk. If you would invest 1,000.00 in Gabelli Global Financial on December 11, 2024 and sell it today you would earn a total of 660.00 from holding Gabelli Global Financial or generate 66.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Global Financial vs. Western Asset Municipal
Performance |
| Timeline |
| Gabelli Global Financial |
| Western Asset Municipal |
Gabelli Global and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Global and Western Asset
The main advantage of trading using opposite Gabelli Global and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Global 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 Global vs. Gmo High Yield | Gabelli Global vs. Barings High Yield | Gabelli Global vs. Ishares Aggregate Bond | Gabelli Global vs. Ft 9331 Corporate |
| Western Asset vs. Delaware Healthcare Fund | Western Asset vs. The Gabelli Healthcare | Western Asset vs. Alphacentric Lifesci Healthcare | Western Asset vs. Blackrock Health Sciences |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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