Correlation Between Gabelli Convertible and The Midcap

Can any of the company-specific risk be diversified away by investing in both Gabelli Convertible and The Midcap 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 The Midcap 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 The Midcap Growth, you can compare the effects of market volatilities on Gabelli Convertible and The Midcap 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 The Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Convertible and The Midcap.

Diversification Opportunities for Gabelli Convertible and The Midcap

-0.05

Correlation Coefficient

Gabelli Convertible  The Midcap

Good diversification

The 3 months correlation between Gabelli and THE is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and The Midcap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Midcap Growth 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 The Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Midcap Growth has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and The Midcap go up and down completely randomly.

Pair Corralation between Gabelli Convertible and The Midcap

Considering the 90-day investment horizon Gabelli Convertible is expected to generate 6.97 times less return on investment than The Midcap. In addition to that, Gabelli Convertible is 1.14 times more volatile than The Midcap Growth. It trades about 0.0 of its total potential returns per unit of risk. The Midcap Growth is currently generating about 0.02 per unit of volatility. If you would invest  4,070  in The Midcap Growth on October 11, 2024 and sell it today you would earn a total of  407.00  from holding The Midcap Growth or generate 10.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gabelli Convertible And  vs.  The Midcap Growth

Gabelli Convertible And

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Convertible And are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gabelli Convertible may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Midcap Growth

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Midcap Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Gabelli Convertible and The Midcap

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

The idea behind Gabelli Convertible And and The Midcap Growth 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.