Correlation Between DWS Municipal and Gabelli Equity
Can any of the company-specific risk be diversified away by investing in both DWS Municipal and Gabelli Equity 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 DWS Municipal and Gabelli Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DWS Municipal Income and The Gabelli Equity, you can compare the effects of market volatilities on DWS Municipal and Gabelli Equity 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 DWS Municipal with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of DWS Municipal and Gabelli Equity.
Diversification Opportunities for DWS Municipal and Gabelli Equity
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DWS and Gabelli is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding DWS Municipal Income and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and DWS Municipal 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 DWS Municipal Income are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of DWS Municipal i.e., DWS Municipal and Gabelli Equity go up and down completely randomly.
Pair Corralation between DWS Municipal and Gabelli Equity
Considering the 90-day investment horizon DWS Municipal Income is expected to generate 1.05 times more return on investment than Gabelli Equity. However, DWS Municipal is 1.05 times more volatile than The Gabelli Equity. It trades about 0.07 of its potential returns per unit of risk. The Gabelli Equity is currently generating about 0.04 per unit of risk. If you would invest 799.00 in DWS Municipal Income on August 28, 2024 and sell it today you would earn a total of 193.00 from holding DWS Municipal Income or generate 24.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DWS Municipal Income vs. The Gabelli Equity
Performance |
| Timeline |
| DWS Municipal Income |
| Gabelli Equity |
DWS Municipal and Gabelli Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DWS Municipal and Gabelli Equity
The main advantage of trading using opposite DWS Municipal and Gabelli Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DWS Municipal position performs unexpectedly, Gabelli Equity 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 Gabelli Equity will offset losses from the drop in Gabelli Equity's long position.| DWS Municipal vs. Aurora Innovation | DWS Municipal vs. HUMANA INC | DWS Municipal vs. Aquagold International | DWS Municipal vs. Barloworld Ltd ADR |
| Gabelli Equity vs. The Gabelli Multimedia | Gabelli Equity vs. The Gabelli Equity | Gabelli Equity vs. Virtus AllianzGI Convertible | Gabelli Equity 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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