Correlation Between Gabelli Convertible and Federated Mdt

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

Diversification Opportunities for Gabelli Convertible and Federated Mdt

0.68

Correlation Coefficient

Gabelli Convertible  Federated Mdt

Poor diversification

The 3 months correlation between Gabelli and Federated is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Federated Mdt Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt Large 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 Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt Large has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Federated Mdt go up and down completely randomly.

Pair Corralation between Gabelli Convertible and Federated Mdt

Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 0.99 times more return on investment than Federated Mdt. However, Gabelli Convertible And is 1.01 times less risky than Federated Mdt. It trades about 0.1 of its potential returns per unit of risk. Federated Mdt Large is currently generating about 0.07 per unit of risk. If you would invest  345.00  in Gabelli Convertible And on September 15, 2024 and sell it today you would earn a total of  49.00  from holding Gabelli Convertible And or generate 14.2% return on investment over 90 days.

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

Gabelli Convertible And  vs.  Federated Mdt Large

Gabelli Convertible And

Risk-Adjusted Performance

0 of 100

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.

Federated Mdt Large

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Mdt Large are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Federated Mdt may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gabelli Convertible and Federated Mdt

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

The idea behind Gabelli Convertible And and Federated Mdt Large 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.