Correlation Between Constellation Energy and Gabelli Utilities
Can any of the company-specific risk be diversified away by investing in both Constellation 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 Constellation 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 Constellation Energy Corp and Gabelli Utilities, you can compare the effects of market volatilities on Constellation 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 Constellation Energy with a short position of Gabelli Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Energy and Gabelli Utilities.
Diversification Opportunities for Constellation Energy and Gabelli Utilities
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Constellation and Gabelli is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Energy Corp and Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and Constellation 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 Constellation Energy Corp 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 Constellation Energy i.e., Constellation Energy and Gabelli Utilities go up and down completely randomly.
Pair Corralation between Constellation Energy and Gabelli Utilities
Considering the 90-day investment horizon Constellation Energy Corp is expected to generate 3.92 times more return on investment than Gabelli Utilities. However, Constellation Energy is 3.92 times more volatile than Gabelli Utilities. It trades about 0.12 of its potential returns per unit of risk. Gabelli Utilities is currently generating about 0.08 per unit of risk. If you would invest 11,810 in Constellation Energy Corp on August 29, 2024 and sell it today you would earn a total of 14,863 from holding Constellation Energy Corp or generate 125.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Constellation Energy Corp vs. Gabelli Utilities
Performance |
| Timeline |
| Constellation Energy Corp |
| Gabelli Utilities |
Constellation Energy and Gabelli Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Energy and Gabelli Utilities
The main advantage of trading using opposite Constellation Energy and Gabelli Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation 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.| Constellation Energy vs. Atlantica Sustainable Infrastructure | Constellation Energy vs. Clearway Energy | Constellation Energy vs. Brookfield Renewable Corp | Constellation Energy vs. Nextera Energy Partners |
| Gabelli Utilities vs. Touchstone Small Cap | Gabelli Utilities vs. Ab Small Cap | Gabelli Utilities vs. Small Cap Growth | Gabelli Utilities vs. Us Small Cap |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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