Correlation Between American States and The Gabelli
Can any of the company-specific risk be diversified away by investing in both American States and The Gabelli 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 American States and The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American States Water and The Gabelli Utilities, you can compare the effects of market volatilities on American States and The Gabelli 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 American States with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of American States and The Gabelli.
Diversification Opportunities for American States and The Gabelli
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and The is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding American States Water and The Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and American States 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 American States Water are associated (or correlated) with The Gabelli. 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 American States i.e., American States and The Gabelli go up and down completely randomly.
Pair Corralation between American States and The Gabelli
Considering the 90-day investment horizon American States is expected to generate 1.19 times less return on investment than The Gabelli. In addition to that, American States is 1.53 times more volatile than The Gabelli Utilities. It trades about 0.17 of its total potential returns per unit of risk. The Gabelli Utilities is currently generating about 0.31 per unit of volatility. If you would invest 550.00 in The Gabelli Utilities on September 3, 2024 and sell it today you would earn a total of 27.00 from holding The Gabelli Utilities or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American States Water vs. The Gabelli Utilities
Performance |
| Timeline |
| American States Water |
| Gabelli Utilities |
American States and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American States and The Gabelli
The main advantage of trading using opposite American States and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American States position performs unexpectedly, The Gabelli 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 The Gabelli will offset losses from the drop in The Gabelli's long position.| American States vs. Middlesex Water | American States vs. SJW Group Common | American States vs. The York Water | American States vs. Artesian Resources |
| The Gabelli vs. Gamco Natural Resources | The Gabelli vs. Gmo Resources | The Gabelli vs. World Energy Fund | The Gabelli vs. Goehring Rozencwajg Resources |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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