Correlation Between Exelon and Gabelli Utilities

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

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

Diversification Opportunities for Exelon and Gabelli Utilities

-0.17

Correlation Coefficient

Exelon  Gabelli Utilities

Good diversification

The 3 months correlation between Exelon and Gabelli is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Exelon and Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and Exelon 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 Exelon 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 Exelon i.e., Exelon and Gabelli Utilities go up and down completely randomly.

Pair Corralation between Exelon and Gabelli Utilities

Considering the 90-day investment horizon Exelon is expected to under-perform the Gabelli Utilities. In addition to that, Exelon is 1.62 times more volatile than Gabelli Utilities. It trades about -0.02 of its total potential returns per unit of risk. Gabelli Utilities is currently generating about 0.07 per unit of volatility. If you would invest  541.00  in Gabelli Utilities on May 4, 2025 and sell it today you would earn a total of  17.00  from holding Gabelli Utilities or generate 3.14% return on investment over 90 days.

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

Exelon  vs.  Gabelli Utilities

Exelon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exelon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Exelon is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

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 Exelon and Gabelli Utilities

The main advantage of trading using opposite Exelon and Gabelli Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exelon 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 Exelon 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.