Correlation Between Small Cap and Gabelli Utilities
Can any of the company-specific risk be diversified away by investing in both Small Cap 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 Small Cap and Gabelli Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Growth and Gabelli Utilities, you can compare the effects of market volatilities on Small Cap 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 Small Cap with a short position of Gabelli Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Gabelli Utilities.
Diversification Opportunities for Small Cap and Gabelli Utilities
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Small and Gabelli is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Growth and Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and Small Cap 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 Small Cap Growth 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 Small Cap i.e., Small Cap and Gabelli Utilities go up and down completely randomly.
Pair Corralation between Small Cap and Gabelli Utilities
Assuming the 90 days horizon Small Cap Growth is expected to under-perform the Gabelli Utilities. In addition to that, Small Cap is 1.74 times more volatile than Gabelli Utilities. It trades about -0.23 of its total potential returns per unit of risk. Gabelli Utilities is currently generating about 0.21 per unit of volatility. If you would invest 556.00 in Gabelli Utilities on November 27, 2024 and sell it today you would earn a total of 14.00 from holding Gabelli Utilities or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Growth vs. Gabelli Utilities
Performance |
| Timeline |
| Small Cap Growth |
| Gabelli Utilities |
Small Cap and Gabelli Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Gabelli Utilities
The main advantage of trading using opposite Small Cap and Gabelli Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap 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.| Small Cap vs. Transamerica Funds | Small Cap vs. Pace Select Advisors | Small Cap vs. T Rowe Price | Small Cap vs. Wilmington Funds |
| Gabelli Utilities vs. Goldman Sachs High | Gabelli Utilities vs. Barings High Yield | Gabelli Utilities vs. Metropolitan West High | Gabelli Utilities vs. Transamerica High Yield |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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