Correlation Between DTE Energy and Gabelli Utilities

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

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

Diversification Opportunities for DTE Energy and Gabelli Utilities

0.61

Correlation Coefficient

DTE Energy  Gabelli Utilities

Poor diversification

The 3 months correlation between DTE and Gabelli is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DTE Energy Co and Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and DTE Energy 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 DTE Energy Co are associated (or correlated) with Gabelli Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utilities has no effect on the direction of DTE Energy i.e., DTE Energy and Gabelli Utilities go up and down completely randomly.

Pair Corralation between DTE Energy and Gabelli Utilities

Considering the 90-day investment horizon DTE Energy Co is expected to generate 1.01 times more return on investment than Gabelli Utilities. However, DTE Energy is 1.01 times more volatile than Gabelli Utilities. It trades about 0.17 of its potential returns per unit of risk. Gabelli Utilities is currently generating about 0.07 per unit of risk. If you would invest  2,094  in DTE Energy Co on May 6, 2025 and sell it today you would earn a total of  158.00  from holding DTE Energy Co or generate 7.55% return on investment over 90 days.

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

DTE Energy Co  vs.  Gabelli Utilities

DTE Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DTE Energy Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, DTE Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Gabelli Utilities

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Utilities are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gabelli Utilities is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DTE Energy and Gabelli Utilities

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

The idea behind DTE Energy Co and Gabelli Utilities 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.