Correlation Between Gabelli Convertible and Payden Absolute

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

Diversification Opportunities for Gabelli Convertible and Payden Absolute

0.36

Correlation Coefficient

Gabelli Convertible  Payden Absolute

Weak diversification

The 3 months correlation between Gabelli and Payden is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Convertible And and Payden Absolute Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Absolute Return 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 Payden Absolute. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Absolute Return has no effect on the direction of Gabelli Convertible i.e., Gabelli Convertible and Payden Absolute go up and down completely randomly.

Pair Corralation between Gabelli Convertible and Payden Absolute

Considering the 90-day investment horizon Gabelli Convertible And is expected to generate 16.41 times more return on investment than Payden Absolute. However, Gabelli Convertible is 16.41 times more volatile than Payden Absolute Return. It trades about 0.19 of its potential returns per unit of risk. Payden Absolute Return is currently generating about 0.38 per unit of risk. If you would invest  386.00  in Gabelli Convertible And on September 13, 2024 and sell it today you would earn a total of  17.00  from holding Gabelli Convertible And or generate 4.4% return on investment over 90 days.

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

Gabelli Convertible And  vs.  Payden Absolute Return

Gabelli Convertible And

Risk-Adjusted Performance

2 of 100

Weak

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.

Payden Absolute Return

Risk-Adjusted Performance

30 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Payden Absolute Return are ranked lower than 30 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Payden Absolute is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Convertible and Payden Absolute

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

The idea behind Gabelli Convertible And and Payden Absolute Return 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.