Correlation Between Gabelli Convertible and Vanguard Small-cap

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

Diversification Opportunities for Gabelli Convertible and Vanguard Small-cap

0.9

Correlation Coefficient

Gabelli Convertible  Vanguard Small-cap

Almost no diversification

The 3 months correlation between Gabelli and Vanguard is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Vanguard Small Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Small Cap 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 Vanguard Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Small Cap has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Vanguard Small-cap go up and down completely randomly.

Pair Corralation between Gabelli Convertible and Vanguard Small-cap

Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 1.17 times more return on investment than Vanguard Small-cap. However, Gabelli Convertible is 1.17 times more volatile than Vanguard Small Cap Growth. It trades about 0.03 of its potential returns per unit of risk. Vanguard Small Cap Growth is currently generating about -0.01 per unit of risk. If you would invest  383.00  in Gabelli Convertible And on October 22, 2024 and sell it today you would earn a total of  5.00  from holding Gabelli Convertible And or generate 1.31% return on investment over 90 days.

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

Gabelli Convertible And  vs.  Vanguard Small Cap 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.

Vanguard Small Cap

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Small Cap Growth are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Vanguard Small-cap may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gabelli Convertible and Vanguard Small-cap

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

The idea behind Gabelli Convertible And and Vanguard Small Cap 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.