Correlation Between Gabelli Convertible and Federated Premier

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

Diversification Opportunities for Gabelli Convertible and Federated Premier

-0.41

Correlation Coefficient

Gabelli Convertible  Federated Premier

Very good diversification

The 3 months correlation between Gabelli and Federated is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier 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 Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Premier has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Federated Premier go up and down completely randomly.

Pair Corralation between Gabelli Convertible and Federated Premier

Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 1.71 times more return on investment than Federated Premier. However, Gabelli Convertible is 1.71 times more volatile than Federated Premier Municipal. It trades about -0.01 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about -0.19 per unit of risk. If you would invest  398.00  in Gabelli Convertible And on September 16, 2024 and sell it today you would lose (4.00) from holding Gabelli Convertible And or give up 1.01% of portfolio value over 90 days.

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

Gabelli Convertible And  vs.  Federated Premier Municipal

Gabelli Convertible And

Risk-Adjusted Performance

0 of 100

Very 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 Premier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Federated Premier Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Pair Trading with Gabelli Convertible and Federated Premier

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

The idea behind Gabelli Convertible And and Federated Premier 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.