Correlation Between Gabelli Convertible and Prudential Muni
Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and Prudential Muni 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 Prudential Muni 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 Prudential Muni High, you can compare the effects of market volatilities on Gabelli Convertible and Prudential Muni 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 Prudential Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and Prudential Muni.
Diversification Opportunities for Gabelli Convertible and Prudential Muni
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gabelli and Prudential is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Prudential Muni High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Muni High 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 Prudential Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Muni High has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Prudential Muni go up and down completely randomly.
Pair Corralation between Gabelli Convertible and Prudential Muni
Considering the 90-day investment horizon Gabelli Convertible is expected to generate 1.03 times less return on investment than Prudential Muni. In addition to that, Gabelli Convertible is 3.8 times more volatile than Prudential Muni High. It trades about 0.03 of its total potential returns per unit of risk. Prudential Muni High is currently generating about 0.11 per unit of volatility. If you would invest 857.00 in Prudential Muni High on September 2, 2024 and sell it today you would earn a total of 108.00 from holding Prudential Muni High or generate 12.6% 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. Prudential Muni High
Performance |
| Timeline |
| Gabelli Convertible And |
| Prudential Muni High |
Gabelli Convertible and Prudential Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Convertible and Prudential Muni
The main advantage of trading using opposite Gabelli Convertible and Prudential Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible position performs unexpectedly, Prudential Muni 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 Prudential Muni will offset losses from the drop in Prudential Muni'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 |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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