Correlation Between Gabelli Multimedia and Western Asset
Can any of the company-specific risk be diversified away by investing in both Gabelli Multimedia 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 Multimedia 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 Multimedia and Western Asset Managed, you can compare the effects of market volatilities on Gabelli Multimedia 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 Multimedia with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Multimedia and Western Asset.
Diversification Opportunities for Gabelli Multimedia and Western Asset
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gabelli and Western is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Multimedia and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed 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 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 Managed has no effect on the direction of Gabelli Multimedia i.e., Gabelli Multimedia and Western Asset go up and down completely randomly.
Pair Corralation between Gabelli Multimedia and Western Asset
Assuming the 90 days trading horizon The Gabelli Multimedia is expected to under-perform the Western Asset. But the preferred stock apears to be less risky and, when comparing its historical volatility, The Gabelli Multimedia is 1.25 times less risky than Western Asset. The preferred stock trades about -0.2 of its potential returns per unit of risk. The Western Asset Managed is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,027 in Western Asset Managed on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Western Asset Managed or generate 3.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
The Gabelli Multimedia vs. Western Asset Managed
Performance |
Timeline |
The Gabelli Multimedia |
Western Asset Managed |
Gabelli Multimedia and Western Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gabelli Multimedia and Western Asset
The main advantage of trading using opposite Gabelli Multimedia and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Multimedia 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 Multimedia vs. Virtus AllianzGI Convertible | Gabelli Multimedia vs. The Gabelli Equity | Gabelli Multimedia vs. Oxford Lane Capital | Gabelli Multimedia vs. The Gabelli Utility |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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