Correlation Between Gabelli Multimedia and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both Gabelli Multimedia and Blackrock Muniholdings 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 Blackrock Muniholdings 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 Blackrock Muniholdings Closed, you can compare the effects of market volatilities on Gabelli Multimedia and Blackrock Muniholdings 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 Blackrock Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Multimedia and Blackrock Muniholdings.
Diversification Opportunities for Gabelli Multimedia and Blackrock Muniholdings
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and Blackrock is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Multimedia and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Blackrock Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of Gabelli Multimedia i.e., Gabelli Multimedia and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between Gabelli Multimedia and Blackrock Muniholdings
Assuming the 90 days trading horizon Gabelli Multimedia is expected to generate 10.97 times less return on investment than Blackrock Muniholdings. But when comparing it to its historical volatility, The Gabelli Multimedia is 1.53 times less risky than Blackrock Muniholdings. It trades about 0.03 of its potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,216 in Blackrock Muniholdings Closed on September 1, 2024 and sell it today you would earn a total of 43.00 from holding Blackrock Muniholdings Closed or generate 3.54% 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. Blackrock Muniholdings Closed
Performance |
| Timeline |
| The Gabelli Multimedia |
| Blackrock Muniholdings |
Gabelli Multimedia and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Multimedia and Blackrock Muniholdings
The main advantage of trading using opposite Gabelli Multimedia and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Multimedia position performs unexpectedly, Blackrock Muniholdings 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 Blackrock Muniholdings will offset losses from the drop in Blackrock Muniholdings' 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 |
| Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. Eaton Vance Municipal | Blackrock Muniholdings vs. DTF Tax Free | Blackrock Muniholdings vs. Aquagold International |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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