Correlation Between Gabelli Convertible and Pimco Flexible

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

Diversification Opportunities for Gabelli Convertible and Pimco Flexible

-0.18

Correlation Coefficient

Gabelli Convertible  Pimco Flexible

Good diversification

The 3 months correlation between Gabelli and Pimco is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Pimco Flexible Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Flexible Municipal 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 Pimco Flexible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Flexible Municipal has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Pimco Flexible go up and down completely randomly.

Pair Corralation between Gabelli Convertible and Pimco Flexible

Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 4.32 times more return on investment than Pimco Flexible. However, Gabelli Convertible is 4.32 times more volatile than Pimco Flexible Municipal. It trades about -0.04 of its potential returns per unit of risk. Pimco Flexible Municipal is currently generating about -0.36 per unit of risk. If you would invest  388.00  in Gabelli Convertible And on September 26, 2024 and sell it today you would lose (5.00) from holding Gabelli Convertible And or give up 1.29% of portfolio value over 90 days.

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

Gabelli Convertible And  vs.  Pimco Flexible Municipal

Gabelli Convertible And

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Convertible And are ranked lower than 10 (%) 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 January 2025.

Pimco Flexible Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pimco Flexible Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pimco Flexible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Convertible and Pimco Flexible

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

The idea behind Gabelli Convertible And and Pimco Flexible Municipal 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.