Correlation Between Gabelli Equity and High Yield
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and High Yield 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 High Yield 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 High Yield Municipal Fund, you can compare the effects of market volatilities on Gabelli Equity and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and High Yield.
Diversification Opportunities for Gabelli Equity and High Yield
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gabelli and High is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal 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 High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and High Yield go up and down completely randomly.
Pair Corralation between Gabelli Equity and High Yield
Assuming the 90 days horizon The Gabelli Equity is expected to generate 2.57 times more return on investment than High Yield. However, Gabelli Equity is 2.57 times more volatile than High Yield Municipal Fund. It trades about 0.05 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.08 per unit of risk. If you would invest 697.00 in The Gabelli Equity on September 12, 2024 and sell it today you would earn a total of 100.00 from holding The Gabelli Equity or generate 14.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
The Gabelli Equity vs. High Yield Municipal Fund
Performance |
| Timeline |
| Gabelli Equity |
| High Yield Municipal |
Gabelli Equity and High Yield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and High Yield
The main advantage of trading using opposite Gabelli Equity and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.| Gabelli Equity vs. Shelton Emerging Markets | Gabelli Equity vs. Locorr Market Trend | Gabelli Equity vs. Ashmore Emerging Markets | Gabelli Equity vs. Investec Emerging Markets |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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