Correlation Between Gabelli Convertible and Pimco Preferred
Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and Pimco Preferred 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 Pimco Preferred 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 Pimco Preferred And, you can compare the effects of market volatilities on Gabelli Convertible and Pimco Preferred 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 Pimco Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and Pimco Preferred.
Diversification Opportunities for Gabelli Convertible and Pimco Preferred
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gabelli and Pimco is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Pimco Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Preferred And 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 Pimco Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Preferred And has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Pimco Preferred go up and down completely randomly.
Pair Corralation between Gabelli Convertible and Pimco Preferred
Considering the 90-day investment horizon Gabelli Convertible is expected to generate 1.75 times less return on investment than Pimco Preferred. In addition to that, Gabelli Convertible is 4.57 times more volatile than Pimco Preferred And. It trades about 0.02 of its total potential returns per unit of risk. Pimco Preferred And is currently generating about 0.19 per unit of volatility. If you would invest 749.00 in Pimco Preferred And on December 12, 2024 and sell it today you would earn a total of 182.00 from holding Pimco Preferred And or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Convertible And vs. Pimco Preferred And
Performance |
| Timeline |
| Gabelli Convertible And |
| Pimco Preferred And |
Gabelli Convertible and Pimco Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Convertible and Pimco Preferred
The main advantage of trading using opposite Gabelli Convertible and Pimco Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible position performs unexpectedly, Pimco Preferred 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 Pimco Preferred will offset losses from the drop in Pimco Preferred's long position.| Gabelli Convertible vs. Gabelli Global Small | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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