Correlation Between Gabelli Convertible and Franklin Federal
Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and Franklin Federal 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 Franklin Federal 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 Franklin Federal Tax Free, you can compare the effects of market volatilities on Gabelli Convertible and Franklin Federal 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 Franklin Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and Franklin Federal.
Diversification Opportunities for Gabelli Convertible and Franklin Federal
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and Franklin is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Franklin Federal Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Federal Tax 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 Franklin Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Federal Tax has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Franklin Federal go up and down completely randomly.
Pair Corralation between Gabelli Convertible and Franklin Federal
Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 4.8 times more return on investment than Franklin Federal. However, Gabelli Convertible is 4.8 times more volatile than Franklin Federal Tax Free. It trades about 0.07 of its potential returns per unit of risk. Franklin Federal Tax Free is currently generating about 0.02 per unit of risk. If you would invest 354.00 in Gabelli Convertible And on October 26, 2024 and sell it today you would earn a total of 36.00 from holding Gabelli Convertible And or generate 10.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gabelli Convertible And vs. Franklin Federal Tax Free
Performance |
Timeline |
Gabelli Convertible And |
Franklin Federal Tax |
Gabelli Convertible and Franklin Federal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gabelli Convertible and Franklin Federal
The main advantage of trading using opposite Gabelli Convertible and Franklin Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible position performs unexpectedly, Franklin Federal 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 Franklin Federal will offset losses from the drop in Franklin Federal'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 |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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