Correlation Between Gabelli Convertible and Hennessy Small
Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and Hennessy Small 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 Hennessy Small 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 Hennessy Small Cap, you can compare the effects of market volatilities on Gabelli Convertible and Hennessy Small 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 Hennessy Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and Hennessy Small.
Diversification Opportunities for Gabelli Convertible and Hennessy Small
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and Hennessy is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Hennessy Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Small Cap 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 Hennessy Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Small Cap has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Hennessy Small go up and down completely randomly.
Pair Corralation between Gabelli Convertible and Hennessy Small
Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 0.76 times more return on investment than Hennessy Small. However, Gabelli Convertible And is 1.32 times less risky than Hennessy Small. It trades about 0.22 of its potential returns per unit of risk. Hennessy Small Cap is currently generating about -0.21 per unit of risk. If you would invest 389.00 in Gabelli Convertible And on September 12, 2024 and sell it today you would earn a total of 19.00 from holding Gabelli Convertible And or generate 4.88% 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. Hennessy Small Cap
Performance |
| Timeline |
| Gabelli Convertible And |
| Hennessy Small Cap |
Gabelli Convertible and Hennessy Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Convertible and Hennessy Small
The main advantage of trading using opposite Gabelli Convertible and Hennessy Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible position performs unexpectedly, Hennessy Small 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 Hennessy Small will offset losses from the drop in Hennessy Small'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 |
| Hennessy Small vs. Df Dent Small | Hennessy Small vs. Touchstone Small Cap | Hennessy Small vs. Champlain Small | Hennessy Small vs. Old Westbury Small |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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