Correlation Between Gabelli Convertible and Profunds Large

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

Diversification Opportunities for Gabelli Convertible and Profunds Large

0.34

Correlation Coefficient

Gabelli Convertible  Profunds Large

Weak diversification

The 3 months correlation between Gabelli and Profunds is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Profunds Large Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profunds Large 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 Profunds Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profunds Large Cap has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Profunds Large go up and down completely randomly.

Pair Corralation between Gabelli Convertible and Profunds Large

Considering the 90-day investment horizon Gabelli Convertible is expected to generate 4.96 times less return on investment than Profunds Large. In addition to that, Gabelli Convertible is 1.13 times more volatile than Profunds Large Cap Growth. It trades about 0.03 of its total potential returns per unit of risk. Profunds Large Cap Growth is currently generating about 0.18 per unit of volatility. If you would invest  3,238  in Profunds Large Cap Growth on September 12, 2024 and sell it today you would earn a total of  337.00  from holding Profunds Large Cap Growth or generate 10.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Gabelli Convertible And  vs.  Profunds Large Cap Growth

Gabelli Convertible And

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Convertible And are ranked lower than 2 (%) 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.

Profunds Large Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Profunds Large Cap Growth are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Profunds Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gabelli Convertible and Profunds Large

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

The idea behind Gabelli Convertible And and Profunds Large 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.