Correlation Between Gabelli Dividend and Western Asset
Can any of the company-specific risk be diversified away by investing in both Gabelli Dividend and Western Asset 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 Dividend and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Dividend and Western Asset Municipal, you can compare the effects of market volatilities on Gabelli Dividend and Western Asset 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 Dividend with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Dividend and Western Asset.
Diversification Opportunities for Gabelli Dividend and Western Asset
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and Western is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Dividend and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal and Gabelli Dividend 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 The Gabelli Dividend are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Municipal has no effect on the direction of Gabelli Dividend i.e., Gabelli Dividend and Western Asset go up and down completely randomly.
Pair Corralation between Gabelli Dividend and Western Asset
Assuming the 90 days trading horizon The Gabelli Dividend is expected to under-perform the Western Asset. In addition to that, Gabelli Dividend is 1.03 times more volatile than Western Asset Municipal. It trades about -0.13 of its total potential returns per unit of risk. Western Asset Municipal is currently generating about 0.13 per unit of volatility. If you would invest 694.00 in Western Asset Municipal on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Western Asset Municipal or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Dividend vs. Western Asset Municipal
Performance |
| Timeline |
| Gabelli Dividend |
| Western Asset Municipal |
Gabelli Dividend and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Dividend and Western Asset
The main advantage of trading using opposite Gabelli Dividend and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Dividend position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Gabelli Dividend vs. The Gabelli Multimedia | Gabelli Dividend vs. The Gabelli Multimedia | Gabelli Dividend vs. The Gabelli Dividend | Gabelli Dividend vs. The Gabelli Equity |
| Western Asset vs. Western Asset Managed | Western Asset vs. Blackrock Muniholdings Quality | Western Asset vs. DTF Tax Free | Western Asset vs. John Hancock Income |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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