Correlation Between Gabelli Multimedia and Invesco Municipal
Can any of the company-specific risk be diversified away by investing in both Gabelli Multimedia and Invesco Municipal 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 Invesco Municipal 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 Invesco Municipal Trust, you can compare the effects of market volatilities on Gabelli Multimedia and Invesco Municipal 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 Invesco Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Multimedia and Invesco Municipal.
Diversification Opportunities for Gabelli Multimedia and Invesco Municipal
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and Invesco is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Multimedia and Invesco Municipal Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Municipal Trust 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 Invesco Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Municipal Trust has no effect on the direction of Gabelli Multimedia i.e., Gabelli Multimedia and Invesco Municipal go up and down completely randomly.
Pair Corralation between Gabelli Multimedia and Invesco Municipal
Assuming the 90 days trading horizon Gabelli Multimedia is expected to generate 2.07 times less return on investment than Invesco Municipal. In addition to that, Gabelli Multimedia is 1.17 times more volatile than Invesco Municipal Trust. It trades about 0.02 of its total potential returns per unit of risk. Invesco Municipal Trust is currently generating about 0.04 per unit of volatility. If you would invest 885.00 in Invesco Municipal Trust on August 28, 2024 and sell it today you would earn a total of 112.00 from holding Invesco Municipal Trust or generate 12.66% 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. Invesco Municipal Trust
Performance |
| Timeline |
| The Gabelli Multimedia |
| Invesco Municipal Trust |
Gabelli Multimedia and Invesco Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Multimedia and Invesco Municipal
The main advantage of trading using opposite Gabelli Multimedia and Invesco Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Multimedia position performs unexpectedly, Invesco Municipal 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 Invesco Municipal will offset losses from the drop in Invesco Municipal'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 |
| Invesco Municipal vs. Invesco Trust For | Invesco Municipal vs. Invesco Quality Municipal | Invesco Municipal vs. Invesco Municipal Opportunity | Invesco Municipal vs. MFS High 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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