Correlation Between Gabelli Convertible and Morgan Stanley

Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and Morgan Stanley 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 Convertible and Morgan Stanley into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gabelli Convertible And and Morgan Stanley China, you can compare the effects of market volatilities on Gabelli Convertible and Morgan Stanley 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 Convertible with a short position of Morgan Stanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and Morgan Stanley.

Diversification Opportunities for Gabelli Convertible and Morgan Stanley

0.22

Correlation Coefficient

Gabelli Convertible  Morgan Stanley

Modest diversification

The 3 months correlation between Gabelli and Morgan is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Morgan Stanley China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Stanley China and Gabelli Convertible 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 Gabelli Convertible And are associated (or correlated) with Morgan Stanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Stanley China has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Morgan Stanley go up and down completely randomly.

Pair Corralation between Gabelli Convertible and Morgan Stanley

Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 0.78 times more return on investment than Morgan Stanley. However, Gabelli Convertible And is 1.28 times less risky than Morgan Stanley. It trades about 0.01 of its potential returns per unit of risk. Morgan Stanley China is currently generating about -0.01 per unit of risk. If you would invest  374.00  in Gabelli Convertible And on December 3, 2024 and sell it today you would earn a total of  9.00  from holding Gabelli Convertible And or generate 2.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Gabelli Convertible And  vs.  Morgan Stanley China

Gabelli Convertible And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gabelli Convertible And has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable fundamental indicators, Gabelli Convertible is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Morgan Stanley China

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Morgan Stanley China are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Morgan Stanley is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gabelli Convertible and Morgan Stanley

The main advantage of trading using opposite Gabelli Convertible and Morgan Stanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Convertible position performs unexpectedly, Morgan Stanley 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 Morgan Stanley will offset losses from the drop in Morgan Stanley's long position.

The idea behind Gabelli Convertible And and Morgan Stanley China pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stocks Directory module to find actively traded stocks across global markets.