Correlation Between Gabelli Convertible and Madison E
Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and Madison E 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 Madison E 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 Madison E Bond, you can compare the effects of market volatilities on Gabelli Convertible and Madison E 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 Madison E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and Madison E.
Diversification Opportunities for Gabelli Convertible and Madison E
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gabelli and Madison is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Madison E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison E Bond 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 Madison E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison E Bond has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Madison E go up and down completely randomly.
Pair Corralation between Gabelli Convertible and Madison E
Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 3.21 times more return on investment than Madison E. However, Gabelli Convertible is 3.21 times more volatile than Madison E Bond. It trades about 0.1 of its potential returns per unit of risk. Madison E Bond is currently generating about 0.05 per unit of risk. If you would invest 321.00 in Gabelli Convertible And on September 12, 2024 and sell it today you would earn a total of 87.00 from holding Gabelli Convertible And or generate 27.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Convertible And vs. Madison E Bond
Performance |
| Timeline |
| Gabelli Convertible And |
| Madison E Bond |
Gabelli Convertible and Madison E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Convertible and Madison E
The main advantage of trading using opposite Gabelli Convertible and Madison E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible position performs unexpectedly, Madison E 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 Madison E will offset losses from the drop in Madison E'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 |
| Madison E vs. Gabelli Convertible And | Madison E vs. Calamos Dynamic Convertible | Madison E vs. Virtus Convertible | Madison E vs. Absolute Convertible Arbitrage |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |