Correlation Between Gabelli Utilities and Gabelli Focus
Can any of the company-specific risk be diversified away by investing in both Gabelli Utilities and Gabelli Focus 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 Utilities and Gabelli Focus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gabelli Utilities and The Gabelli Focus, you can compare the effects of market volatilities on Gabelli Utilities and Gabelli Focus 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 Utilities with a short position of Gabelli Focus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utilities and Gabelli Focus.
Diversification Opportunities for Gabelli Utilities and Gabelli Focus
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gabelli and Gabelli is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Utilities and The Gabelli Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Focus and Gabelli Utilities 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 Utilities are associated (or correlated) with Gabelli Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Focus has no effect on the direction of Gabelli Utilities i.e., Gabelli Utilities and Gabelli Focus go up and down completely randomly.
Pair Corralation between Gabelli Utilities and Gabelli Focus
Assuming the 90 days horizon Gabelli Utilities is expected to generate 1.26 times more return on investment than Gabelli Focus. However, Gabelli Utilities is 1.26 times more volatile than The Gabelli Focus. It trades about -0.06 of its potential returns per unit of risk. The Gabelli Focus is currently generating about -0.13 per unit of risk. If you would invest 577.00 in Gabelli Utilities on January 30, 2024 and sell it today you would lose (8.00) from holding Gabelli Utilities or give up 1.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Gabelli Utilities vs. The Gabelli Focus
Performance |
Timeline |
Gabelli Utilities |
Gabelli Focus |
Gabelli Utilities and Gabelli Focus Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gabelli Utilities and Gabelli Focus
The main advantage of trading using opposite Gabelli Utilities and Gabelli Focus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Utilities position performs unexpectedly, Gabelli Focus 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 Focus will offset losses from the drop in Gabelli Focus' long position.Gabelli Utilities vs. Dominion Energy | Gabelli Utilities vs. Atlantica Sustainable Infrastructure | Gabelli Utilities vs. Consolidated Edison | Gabelli Utilities vs. Excelerate Energy |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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