Correlation Between Gabelli Multimedia and MFS Government
Can any of the company-specific risk be diversified away by investing in both Gabelli Multimedia and MFS Government 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 Multimedia and MFS Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Multimedia and MFS Government Markets, you can compare the effects of market volatilities on Gabelli Multimedia and MFS Government 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 Multimedia with a short position of MFS Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Multimedia and MFS Government.
Diversification Opportunities for Gabelli Multimedia and MFS Government
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and MFS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Multimedia and MFS Government Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Government Markets and Gabelli Multimedia 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 Multimedia are associated (or correlated) with MFS Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Government Markets has no effect on the direction of Gabelli Multimedia i.e., Gabelli Multimedia and MFS Government go up and down completely randomly.
Pair Corralation between Gabelli Multimedia and MFS Government
Assuming the 90 days trading horizon The Gabelli Multimedia is expected to generate 0.98 times more return on investment than MFS Government. However, The Gabelli Multimedia is 1.02 times less risky than MFS Government. It trades about 0.09 of its potential returns per unit of risk. MFS Government Markets is currently generating about 0.08 per unit of risk. If you would invest 2,189 in The Gabelli Multimedia on September 3, 2024 and sell it today you would earn a total of 144.00 from holding The Gabelli Multimedia or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Multimedia vs. MFS Government Markets
Performance |
| Timeline |
| The Gabelli Multimedia |
| MFS Government Markets |
Gabelli Multimedia and MFS Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Multimedia and MFS Government
The main advantage of trading using opposite Gabelli Multimedia and MFS Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Multimedia position performs unexpectedly, MFS Government 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 MFS Government will offset losses from the drop in MFS Government's long position.| Gabelli Multimedia vs. Virtus AllianzGI Convertible | Gabelli Multimedia vs. The Gabelli Equity | Gabelli Multimedia vs. Oxford Lane Capital | Gabelli Multimedia vs. The Gabelli Utility |
| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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