Correlation Between Gabelli Convertible and Growth Opportunities
Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and Growth Opportunities 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 Growth Opportunities 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 Growth Opportunities Fund, you can compare the effects of market volatilities on Gabelli Convertible and Growth Opportunities 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 Growth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and Growth Opportunities.
Diversification Opportunities for Gabelli Convertible and Growth Opportunities
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gabelli and Growth is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities 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 Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Growth Opportunities go up and down completely randomly.
Pair Corralation between Gabelli Convertible and Growth Opportunities
Considering the 90-day investment horizon Gabelli Convertible is expected to generate 13.9 times less return on investment than Growth Opportunities. In addition to that, Gabelli Convertible is 1.11 times more volatile than Growth Opportunities Fund. It trades about 0.01 of its total potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.12 per unit of volatility. If you would invest 3,135 in Growth Opportunities Fund on September 14, 2024 and sell it today you would earn a total of 2,604 from holding Growth Opportunities Fund or generate 83.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Convertible And vs. Growth Opportunities Fund
Performance |
| Timeline |
| Gabelli Convertible And |
| Growth Opportunities |
Gabelli Convertible and Growth Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Convertible and Growth Opportunities
The main advantage of trading using opposite Gabelli Convertible and Growth Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible position performs unexpectedly, Growth Opportunities 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 Growth Opportunities will offset losses from the drop in Growth Opportunities' 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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