Correlation Between Gabelli Utility and Gabelli Dividend
Can any of the company-specific risk be diversified away by investing in both Gabelli Utility and Gabelli Dividend 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 Gabelli Utility and Gabelli Dividend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Utility and The Gabelli Dividend, you can compare the effects of market volatilities on Gabelli Utility and Gabelli Dividend 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 Gabelli Utility with a short position of Gabelli Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Utility and Gabelli Dividend.
Diversification Opportunities for Gabelli Utility and Gabelli Dividend
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gabelli and Gabelli is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Utility and The Gabelli Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Dividend and Gabelli Utility 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 The Gabelli Utility are associated (or correlated) with Gabelli Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Dividend has no effect on the direction of Gabelli Utility i.e., Gabelli Utility and Gabelli Dividend go up and down completely randomly.
Pair Corralation between Gabelli Utility and Gabelli Dividend
Assuming the 90 days trading horizon The Gabelli Utility is expected to generate 1.61 times more return on investment than Gabelli Dividend. However, Gabelli Utility is 1.61 times more volatile than The Gabelli Dividend. It trades about 0.05 of its potential returns per unit of risk. The Gabelli Dividend is currently generating about -0.13 per unit of risk. If you would invest 2,430 in The Gabelli Utility on August 31, 2024 and sell it today you would earn a total of 21.00 from holding The Gabelli Utility or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Utility vs. The Gabelli Dividend
Performance |
| Timeline |
| Gabelli Utility |
| Gabelli Dividend |
Gabelli Utility and Gabelli Dividend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Utility and Gabelli Dividend
The main advantage of trading using opposite Gabelli Utility and Gabelli Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Utility position performs unexpectedly, Gabelli Dividend 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 Dividend will offset losses from the drop in Gabelli Dividend's long position.| Gabelli Utility vs. The Gabelli Equity | Gabelli Utility vs. Virtus AllianzGI Convertible | Gabelli Utility vs. The Gabelli Equity | Gabelli Utility vs. Oxford Lane Capital |
| Gabelli Dividend vs. Virtus AllianzGI Convertible | Gabelli Dividend vs. The Gabelli Equity | Gabelli Dividend vs. Oxford Lane Capital | Gabelli Dividend vs. The Gabelli Utility |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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