Correlation Between CBH and Gabelli Utility
Can any of the company-specific risk be diversified away by investing in both CBH and Gabelli Utility 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 CBH and Gabelli Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBH and Gabelli Utility Closed, you can compare the effects of market volatilities on CBH and Gabelli Utility 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 CBH with a short position of Gabelli Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and Gabelli Utility.
Diversification Opportunities for CBH and Gabelli Utility
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CBH and Gabelli is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CBH and Gabelli Utility Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utility Closed and CBH 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 CBH are associated (or correlated) with Gabelli Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utility Closed has no effect on the direction of CBH i.e., CBH and Gabelli Utility go up and down completely randomly.
Pair Corralation between CBH and Gabelli Utility
Considering the 90-day investment horizon CBH is expected to generate 0.35 times more return on investment than Gabelli Utility. However, CBH is 2.82 times less risky than Gabelli Utility. It trades about 0.05 of its potential returns per unit of risk. Gabelli Utility Closed is currently generating about 0.0 per unit of risk. If you would invest 830.00 in CBH on November 1, 2024 and sell it today you would earn a total of 89.00 from holding CBH or generate 10.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 79.51% |
| Values | Daily Returns |
CBH vs. Gabelli Utility Closed
Performance |
| Timeline |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Gabelli Utility Closed |
CBH and Gabelli Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBH and Gabelli Utility
The main advantage of trading using opposite CBH and Gabelli Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH position performs unexpectedly, Gabelli Utility 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 Utility will offset losses from the drop in Gabelli Utility's long position.| CBH vs. MFS Investment Grade | CBH vs. Eaton Vance National | CBH vs. Rivernorth Opportunistic Municipalome | CBH vs. RiverNorth Managed Duration |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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