Correlation Between Gabelli Equity and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and High-yield Municipal 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 Municipal 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 Municipal 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 Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and High-yield Municipal.
Diversification Opportunities for Gabelli Equity and High-yield Municipal
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gabelli and High-yield is 0.13. 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 Municipal. 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 Municipal go up and down completely randomly.
Pair Corralation between Gabelli Equity and High-yield Municipal
Assuming the 90 days horizon The Gabelli Equity is expected to generate 3.14 times more return on investment than High-yield Municipal. However, Gabelli Equity is 3.14 times more volatile than High Yield Municipal Fund. It trades about 0.11 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.12 per unit of risk. If you would invest 727.00 in The Gabelli Equity on September 3, 2024 and sell it today you would earn a total of 79.00 from holding The Gabelli Equity or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Equity vs. High Yield Municipal Fund
Performance |
| Timeline |
| Gabelli Equity |
| High Yield Municipal |
Gabelli Equity and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and High-yield Municipal
The main advantage of trading using opposite Gabelli Equity and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, High-yield Municipal 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 Municipal will offset losses from the drop in High-yield Municipal's long position.| Gabelli Equity vs. Vanguard Total Stock | Gabelli Equity vs. Vanguard 500 Index | Gabelli Equity vs. Vanguard Total Stock | Gabelli Equity vs. Vanguard Total Stock |
| High-yield Municipal vs. Massmutual Select Diversified | High-yield Municipal vs. The Emerging Markets | High-yield Municipal vs. Legg Mason Partners | High-yield Municipal vs. Fundvantage Trust |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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