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 Diversified, 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
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gabelli and Western is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Financial and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified 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 Diversified 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 3.38 times more return on investment than Western Asset. However, Gabelli Global is 3.38 times more volatile than Western Asset Diversified. It trades about 0.22 of its potential returns per unit of risk. Western Asset Diversified is currently generating about 0.06 per unit of risk. If you would invest 1,570 in Gabelli Global Financial on November 1, 2024 and sell it today you would earn a total of 67.00 from holding Gabelli Global Financial or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Global Financial vs. Western Asset Diversified
Performance |
| Timeline |
| Gabelli Global Financial |
| Western Asset Diversified |
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. The Gabelli Small | Gabelli Global vs. Northern Small Cap | Gabelli Global vs. Lord Abbett Diversified | Gabelli Global vs. Madison Diversified Income |
| Western Asset vs. Diversified Bond Fund | Western Asset vs. Columbia Diversified Equity | Western Asset vs. Guggenheim Diversified Income | Western Asset vs. Federated Hermes Conservative |
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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