Correlation Between Consolidated Edison and The Gabelli
Can any of the company-specific risk be diversified away by investing in both Consolidated Edison 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 Consolidated Edison and The Gabelli into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Edison and The Gabelli Utilities, you can compare the effects of market volatilities on Consolidated Edison 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 Consolidated Edison with a short position of The Gabelli. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Edison and The Gabelli.
Diversification Opportunities for Consolidated Edison and The Gabelli
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Consolidated and The is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Edison and The Gabelli Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utilities and Consolidated Edison 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 Consolidated Edison 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 Consolidated Edison i.e., Consolidated Edison and The Gabelli go up and down completely randomly.
Pair Corralation between Consolidated Edison and The Gabelli
Allowing for the 90-day total investment horizon Consolidated Edison is expected to under-perform the The Gabelli. In addition to that, Consolidated Edison is 1.24 times more volatile than The Gabelli Utilities. It trades about -0.01 of its total potential returns per unit of risk. The Gabelli Utilities is currently generating about 0.2 per unit of volatility. If you would invest 539.00 in The Gabelli Utilities on September 1, 2024 and sell it today you would earn a total of 18.00 from holding The Gabelli Utilities or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Consolidated Edison vs. The Gabelli Utilities
Performance |
| Timeline |
| Consolidated Edison |
| Gabelli Utilities |
Consolidated Edison and The Gabelli Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Edison and The Gabelli
The main advantage of trading using opposite Consolidated Edison and The Gabelli positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Edison 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.| Consolidated Edison vs. Duke Energy | Consolidated Edison vs. Dominion Energy | Consolidated Edison vs. American Electric Power | Consolidated Edison vs. Nextera Energy |
| The Gabelli vs. Dominion Energy | The Gabelli vs. Atlantica Sustainable Infrastructure | The Gabelli vs. Consolidated Edison | The Gabelli vs. Eversource Energy |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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