Correlation Between Gabelli Convertible and American Beacon
Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and American Beacon 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 Convertible and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Convertible And and American Beacon Large, you can compare the effects of market volatilities on Gabelli Convertible and American Beacon 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 Convertible with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and American Beacon.
Diversification Opportunities for Gabelli Convertible and American Beacon
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gabelli and American is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and American Beacon Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Large and Gabelli Convertible 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 Convertible And are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Large has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and American Beacon go up and down completely randomly.
Pair Corralation between Gabelli Convertible and American Beacon
Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 1.17 times more return on investment than American Beacon. However, Gabelli Convertible is 1.17 times more volatile than American Beacon Large. It trades about 0.5 of its potential returns per unit of risk. American Beacon Large is currently generating about 0.29 per unit of risk. If you would invest 366.00 in Gabelli Convertible And on September 1, 2024 and sell it today you would earn a total of 37.00 from holding Gabelli Convertible And or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gabelli Convertible And vs. American Beacon Large
Performance |
| Timeline |
| Gabelli Convertible And |
| American Beacon Large |
Gabelli Convertible and American Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Convertible and American Beacon
The main advantage of trading using opposite Gabelli Convertible and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.| Gabelli Convertible vs. Gabelli Global Small | Gabelli Convertible vs. MFS Investment Grade | Gabelli Convertible vs. Eaton Vance National | Gabelli Convertible vs. GAMCO Natural Resources |
| American Beacon vs. American Beacon Ssi | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Bridgeway | American Beacon vs. American Beacon Twentyfour |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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