Correlation Between Gabelli MultiMedia and Gabelli Convertible

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

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

Diversification Opportunities for Gabelli MultiMedia and Gabelli Convertible

0.56

Correlation Coefficient

Gabelli MultiMedia  Gabelli Convertible

Very weak diversification

The 3 months correlation between Gabelli and Gabelli is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli MultiMedia Mutual and Gabelli Convertible And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Convertible And and Gabelli MultiMedia 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 MultiMedia Mutual are associated (or correlated) with Gabelli Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Convertible And has no effect on the direction of Gabelli MultiMedia i.e., Gabelli MultiMedia and Gabelli Convertible go up and down completely randomly.

Pair Corralation between Gabelli MultiMedia and Gabelli Convertible

Considering the 90-day investment horizon Gabelli MultiMedia Mutual is expected to generate 0.72 times more return on investment than Gabelli Convertible. However, Gabelli MultiMedia Mutual is 1.38 times less risky than Gabelli Convertible. It trades about 0.2 of its potential returns per unit of risk. Gabelli Convertible And is currently generating about 0.07 per unit of risk. If you would invest  426.00  in Gabelli MultiMedia Mutual on December 28, 2024 and sell it today you would earn a total of  41.00  from holding Gabelli MultiMedia Mutual or generate 9.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Gabelli MultiMedia Mutual  vs.  Gabelli Convertible And

Gabelli MultiMedia Mutual

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli MultiMedia Mutual are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Gabelli MultiMedia may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Gabelli Convertible And

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Convertible And are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pair Trading with Gabelli MultiMedia and Gabelli Convertible

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

The idea behind Gabelli MultiMedia Mutual and Gabelli Convertible And 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.

Check out your portfolio center.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.